Paragon Offshore gets third exclusivity extension, requests fourth

By Caroline Salls

Pittsburgh, Jan. 25 – Paragon Offshore plc received a third extension of its exclusive periods for filing and soliciting votes on a Chapter 11 plan, according to an order filed Wednesday with the U.S. Bankruptcy Court for the District of Delaware.

Specifically, Paragon’s exclusive filing period was extended through Jan. 26 from Dec. 15 and the solicitation period through March 27 from Jan. 13.

Since the last extension of exclusivity granted in November, the company said it has focused its efforts on conducting good-faith discussions with its senior secured revolver and term loan lenders and an informal group of unsecured noteholders about the framework for a consensual Chapter 11 plan.

An extension will “safeguard the debtors’ ability to advance these cases” to a consensual resolution without the “value deterioration and disruption to the debtors’ business operations” that likely would be caused by the filing of competing plans, the motion said.

Also on Wednesday, the company requested a fourth exclusivity extension under which the plan-filing period would be further extended through March 31 and the solicitation period through May 30.

As previously reported, the company reached an agreement with its lenders on Jan. 18 that sets the terms of a new plan.

Paragon said it is finalizing the new plan, which is expected to be filed within the next few weeks or sooner.

“Maintaining exclusivity will allow the debtors the time and opportunity to attempt to bridge the divide between their secured lenders and unsecured bondholders and negotiate a global consensual restructuring,” the motion said.

“But even if a global consensual restructuring does not materialize, an exclusivity extension will provide the debtors the time required to put forth the new plan, a plan they believe is viable and provides a realistic path out of Chapter 11, without the value deterioration and disruption to the debtors’ business operations that likely would be caused by the filing and prosecution of competing plans.”

Paragon, a Houston-based provider of offshore drilling rigs, filed for bankruptcy on Feb. 14, 2016. The Chapter 11 case number is 16-10386.

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