In re Sabine Oil & Gas Corp.
| Decision Date | 18 August 2016 |
| Docket Number | Case No. 15-11835 SCC Jointly Administered |
| Citation | 555 B.R. 180 |
| Parties | In re: Sabine Oil & Gas Corporation, et al., Debtors. |
| Court | U.S. Bankruptcy Court — Southern District of New York |
KIRKLAND & ELLIS LLP, KIRKLAND & ELLIS INTERNATIONAL LLP, 601 Lexington Avenue, New York, New York 10022 By: Jonathan S. Henes, P.C., Christopher J. Marcus, P.C., 300 North LaSalle, Chicago, Illinois 60654 By: Gabor Balassa, P.C., A. Katrine Jakola, Esq., Whitney L. Becker, Esq., Counsel to the Debtors
ROPES & GRAY LLP, 1211 Avenue of the Americas, New York, New York 10036 By: Mark R. Somerstein, Esq., Gregg Galardi, Esq., Gregg Weiner, Esq., Daniel McCaughey, Esq., Counsel to the Official Committee of Unsecured Creditors
BROWN RUDNICK LLP, Seven Times Square, New York, New York 10036 By:
Robert J. Stark, Esq., Daniel J. Saval, Esq., Counsel to the Forest Notes Indenture Trustees
LINKLATERS LLP, 1345 Avenue of the Americas, New York, New York 10105 By: Margot B. Schonholtz, Esq., Robert H. Trust, Esq., Counsel to Wells Fargo, National Association, as First Lien Agent
PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP, 1285 Avenue of the Americas, New York, New York 10019 By: Moses Silverman, Esq., Brian S. Hermann, Esq., Kyle J. Kimpler, Esq., Counsel to Wilmington Trust, N.A. as Second Lien Agent
QUINN EMANUEL URQUHART & SULLIVAN, LLP, 51 Madison Avenue, 22nd Floor, New York, New York 10010 By: Andrew J. Rossman, Esq., Susheel Kirpalani, Esq., Julia M. Beskin, Esq., Counsel to FRC Founders Corporation, Sabine Investor Holdings LLC, First Reserve Fund XI, L.P., First Reserve GP XI, L.P., First Reserve GP XI, Inc., Alex Krueger, Brooks Shughart, Michael France, and Joshua Weiner
SHEARMAN & STERLING LLP, 599 Lexington Avenue, New York, New York 10022 By: Joseph J. Frank, Esq., Fredric Sosnick, Esq., Counsel to Barclays Bank PLC and Barclays Capital Inc.
KASOWITZ, BENSON, TORRES & FRIEDMAN LLP, 1633 Broadway, New York, NY 10019 By: Kenneth R. David, Esq., Daniel A. Fliman, Esq., Counsel to Richard J. Carty, Loren Carroll, Dod Fraser, James Lee, James Lightner, Patrick R. McDonald, Raymond Wilcox, and Victor Wind
AKIN, GUMP, STRAUSS, HAUER & FELD LLP, One Bryant Park, New York, New York 10036 By: Daniel H. Golden, Esq., Abid Qureshi, Esq., EMMET, MARVIN & MARTIN, LLP, 120 Broadway, 32nd Floor, New York, New York 10271 By: Edward P. Zujkowski, Esq., Thomas A. Pitta, Esq., Co-counsel to The Bank of New York Mellon Trust Company, N.A. as Trustee under the 2017 Notes Indenture
CURTIS, MALLET-PREVOST, COLT & MOSLE, LLP, 101 Park Avenue, New York, New York 10178 By: Steven J. Reisman, Esq., Theresa A. Foudy, Esq., Counsel to Sabine Directors Duane Radtke, David Sambrooks, and John Yearwood
TABLE OF CONTENTS
“It's not even close.” So said Sabine's Chief Restructuring Officer when asked his opinion during the confirmation hearing as to the reasonableness of the settlement embodied in the Debtors' plan of reorganization.
Just six months ago, the Debtors in these chapter 11 cases engaged in a lengthy evidentiary hearing in this Court to determine whether or not the Official Committee of Unsecured Creditors should be granted so-called STN standing to pursue a sweeping set of claims against the Debtors' lenders as well as the Debtors' current and former officers and directors. Nine days of live testimony, hundreds of exhibits, and five days of closing argument later, the Court denied the Committee's request for STN standing. The proceedings took an enormous toll on the Debtors: tens of millions of dollars in litigation costs were incurred and key members of senior management had no choice but to attend every day of the hearing rather than focus on maintaining the stability of the business and the morale of their employees.
Undaunted, the Debtors filed a plan of reorganization, dated April 29, 2016, and commenced a confirmation hearing on Monday, June 13, 2016—just thirty-six hours after arguing before the District Court on the Committee's appeal of this Court's STN decision. In the two months between the STN decision and the commencement of the confirmation hearing, the parties once again engaged in weeks of depositions, discovery, and pre-trial skirmishes. Five days into the hearing, the District Court issued its decision in favor of the Debtors on the STN appeal. Ten days of live testimony, hundreds of exhibits, and ten hours of closing argument later, it is eminently clear that the plan should be confirmed. The proceedings again took an enormous financial toll on the Debtors and visited further human capital costs on members of senior management and the Debtors' employees.
What makes this case unique is not that it was litigious and expensive and exhausting for all involved. Rather, it is the enormous extent to which it was unnecessarily litigious and expensive. Notwithstanding the complexities of certain of the issues implicated by...
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