Hercules Offshore modified joint pre-packaged plan confirmed by court

By Caroline Salls

Pittsburgh, Nov. 17 – Hercules Offshore, Inc.’s modified joint pre-packaged Chapter 11 plan was confirmed on Tuesday, according to an 8-K filed Thursday with the Securities and Exchange Commission.

As previously reported, the U.S. Bankruptcy Court for the District of Delaware announced on Nov. 1 that it would confirm the plan.

Hercules filed a revised plan in September that incorporates the settlement that came out of a mediation process.

Under the revisions, holders of Hercules Offshore’s common stock will receive a cash payment and stock, if the class votes to accept the plan, on the effective date of the plan or as soon as possible afterwards.

Under the previous plan, shareholders would have had to wait until lenders were paid in full before receiving any distribution. The revised plan eliminated that waiting period.

The payment is subject to the board that is supervising the wind down of the company determining that there is enough cash available to make the payment from asset sales or the claims reconciliation process.

Under the plan, all of the assets left unsold at the completion of the Chapter 11 process will be placed into a wind-down vehicle to ensure their continued operation until sales are finalized.

Unsecured creditors will be paid in full in the ordinary course of business or at the completion of the Chapter 11 process.

The company’s lenders will receive interests and a wind-down claim but have agreed to compromise their own recoveries to pay unsecured claims in full and provide a recovery to the shareholders before being paid in full if the shareholder class voted to accept the plan.

Hercules, a Houston-based provider of offshore drilling equipment and services, filed bankruptcy on June 6. The Chapter 11 case number is 16-11385.

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