Paragon Offshore directors ask U.K. court to appoint administrators

By Caroline Salls

Pittsburgh, May 17 – Paragon Offshore plc’s board of directors filed an application with the High Court of Justice, Chancery Division, Companies Court of England and Wales for the appointment of two partners of Deloitte LLP to serve as joint administrators of the company in the United Kingdom, according to a news release.

Paragon said its decision to apply for the appointment of the proposed administrators is a necessary component of its Chapter 11 plan of reorganization.

Under the plan, Paragon’s existing equity will be deemed worthless, and the company’s secured creditors and unsecured bondholders will receive equity in a new reorganized parent company.

“We believe that the appointment of administrators is an important positive step forward in Paragon’s restructuring process,” president and chief executive officer Dean E. Taylor said in the release.

“Our consensual plan will eliminate more than $2.4 billion of existing debt and allow us to emerge from Chapter 11 as a stronger, better positioned company capable of managing the challenges of this difficult environment.

“If the application is approved by the English Court, the next milestone will be our confirmation hearing, scheduled to commence June 7, 2017 in Delaware, following which, if confirmed, we expect to emerge from Chapter 11 in July.”

Under administration, Paragon said it will continue to conduct business in its normal course.

According to the release, the administrators will assume all powers to manage the affairs of the company; however, Paragon’s existing board has agreed to remain involved in an advisory capacity to the administrators until the company emerges from Chapter 11.

The existing executive management team will remain responsible for the operational management of the Paragon group.

The administrator appointment application is scheduled to be heard by the English court on May 23.

Weil, Gotshal & Manges LLP is serving as legal counsel to Paragon, and Lazard is serving as financial adviser.

Paragon, a Houston-based provider of offshore drilling rigs, filed for bankruptcy on Feb. 14, 2016 in the U.S. Bankruptcy Court for the District of Delaware. The Chapter 11 case number is 16-10386.

© 2015 Prospect News.
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