Ian Peck in Law360: For Texas Energy Companies, Ch. 11 Loomed Large In 2015

12/22/2015

Texas and the Lone Star State’s energy companies played an outsized role in boom times, and Texas energy companies hard hit by declining oil prices are dominating the bankruptcy filings that have started to reach courts at an accelerated pace as 2015 winds down.

Low oil prices in 2015 cast a shadow over a thriving energy industry that had been enjoying years of record-shattering success, but for much of the year there was optimism oil prices would bounce back in time not to leave too much lasting damage.Today, as oil prices continue to hover below $40 a barrel, much of that optimism has faded, and while efforts continue to sell off assets and restructure debt out of court, more energy companies have been filing for Chapter 11 protection in the last few months of the year...

“What we’re seeing is some of the larger companies are choosing to file in Delaware, and a few in New York,” Haynes and Boone’s Ian Peck, who chairs the firm’s bankruptcy and business restructuring section, said. “More of the midsized companies are choosing to file in their home state. That’s not universal, but it seems to be the trend."

... Far more work is taking place out of court, as borrowers and lenders are coming up with ways to minimize expenses and wait out the downturn, or try to preserve the value of the company until the market rebounds and they can sell at a reasonable price, Peck said. He said borrowers and lenders are in many cases working together to operate in a slimmed-down mode until the situation improves, but that there are fewer transactions happening behind closed doors than you might think.

Excerpted from Law360. To read the full article, click here (subscription required).

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