One holdout member in Seadrill's “select commitment parties group” has not agreed to a waiver of privilege that would facilitate negotiations among the company and its stakeholders, impeding the Seadrill debtors' alternative restructuring proposal discussions, according to sources with knowledge with the matter. The
bondholder group, advised by Akin Gump and Moelis, comprises Aristeia Capital, GLG Partners, Saba Capital and Whitebox Advisors.
A bondholder in the creditors’ group that had entered into a restructuring support agreement with the company did not give up on the original deal, effectively preventing any new deal other than Seadrill’s
current plan and hindering communication among the parties, the sources said.
The Seadrill debtors’ and Seadrill owner John Fredriksen’s investment vehicle Hemen Holdings’ hands are now tied because of the restriction, the sources added, even though Seadrill has a fiduciary duty to pursue the best reorganization deal for stakeholders. The debtors have a “fiduciary out” under the transaction documents that, generally speaking, would permit the debtors’ board to walk away from the deal incorporated under the current plan in favor of a superior alternative proposal if failure to pursue the alternative deal would be inconsistent with their fiduciary duties to the company.
Representatives for Seadrill and Hemen have engaged in constructive negotiations, the sources said.
On Jan. 24, the Seadrill debtors
adjourned their
disclosure statement hearing to Feb. 7 at 2 p.m. ET and extended the disclosure statement objection deadline for the ad hoc bondholder group, Barclays Capital and Seadrill’s UCC to Feb. 1 at 6 p.m. ET. No DS objections were filed as of the end of Thursday.
Judge David Jones’ online calendar, however, does not show Seadrill as part of the judge’s Feb. 7 hearing, so it remains unclear whether the debtors will be going forward on that date. The debtors were scheduled to have a hearing earlier this week, but the Feb. 1 status conference was
canceled so that the debtors could “use [the] additional time to continue to engage in settlement discussions with all parties in interest” ahead of the DS approval hearing.
Seadrill and its legal advisor Kirkland, as well as the select commitment parties’ advisors, Akin Gump and Moelis, did not immediately respond to requests for comment.
An ad hoc group of Seadrill bondholders
holding 27% of the total unsecured bonds
presented an alternative restructuring proposal to the company that would give creditors more equal rights to new notes and new equity for putting up capital than would the debtors’
chapter 11 plan, Reorg reported. One of the debtors’
filings in early January confirmed that the bondholder group has funded 10% of its proposed capital commitment amount as a cash deposit.
Barclays submitted a separate alternative restructuring proposal, which the debtors were also continuing to analyze, according to the disclosure statement. None of the debtors’ filings have thus far noted whether Barclays met the Jan. 8 deadline to post a cash deposit equal to 10% of its proposed commitment amount.