backKing & Spalding represented Capital One in its capacity as the prepetition secured agent on the secured credit facility of Castex Energy, an upstream exploration and production company focused primarily on offshore drilling, in connection with its Chapter 11 case. In the climate of continued falling energy prices, Castex, substantially all equity of which was owned by the prepetition secured lenders on account of a prior chapter 11 filing, filed for Chapter 11 protection in Houston, Texas with approximately $200 million in debt.
The bankruptcy case involved litigation and contentious negotiations – particularly around future funding of offshore decommissioning obligations stemming from the historic operations of Castex – but ultimately resulted in a very complex but fully consensual chapter 11 plan distributing, among other things, the proceeds arising from a sale of substantially all assets to Talos Energy.
In confirming the chapter 11 plan, Judge Marvin Isgur described the chapter 11 plan as a “pretty amazing accomplishment” and an “amazing” deal.