Milbank successfully represented an ad hoc committee of certain financial institutions (the “Ad Hoc Committee”) holding secured term loans of UTEX Industries, Inc. and its affiliates (collectively, “Utex”) in Utex’s chapter 11 cases.
Utex, a leading manufacturer of custom-engineered and specialty sealing components for the oil and gas extraction market, filed for chapter 11 bankruptcy protection in the Southern District of Texas on October 8, 2020, following the industry downturn.
Leading up to the bankruptcy filing, the Milbank team successfully negotiated a restructuring support agreement (the “RSA”) on behalf of the Ad Hoc Committee with Utex, its sponsor, and its major second lien lenders. The RSA contemplated a prepackaged plan of reorganization and featured a bespoke resolution of a complex tax issue involving Utex and certain of its affiliates.
Utex’s prepackaged plan, which was widely supported by Utex’s stakeholders, converted more than $700 million of debt into equity. Judge David Jones confirmed the plan on October 23, 2020, and Utex emerged from chapter 11 on December 3, 2020, after less than two months in bankruptcy, resulting in minimal disruption to Utex’s business.
The Milbank team was led by Financial Restructuring partners Evan Fleck and Matthew Brod and included partners Russell Kestenbaum (Tax), Roland Hlawaty (Corporate), and Mike Shah (Executive Compensation and Employee Benefits); special counsel Jennifer Harris (Alternative Investments); and associates Daniel Porat (Financial Restructuring), Bobby Yeh and Carolyn Carpenter (Alternative Investments), Corey Spector (Tax), Alex Wang and Frank Pensabene (Corporate), and Kelly Bartley (Executive Compensation and Employee Benefits), among other Milbank attorneys.
