Valaris’ exclusivity extension motion draws objection from Citibank

By Sarah Lizee

Olympia, Wash., Dec. 30 – Valaris plc’s motion for a 120-day extension of its exclusive periods to file and solicit votes on a Chapter 11 plan drew an objection Monday from revolving credit facility agent Citibank, NA, according to a filing with the U.S. Bankruptcy Court Southern District of Texas.

As previously reported, the company asked the court to extend the plan filing period through April 16 from Dec. 17 and the solicitation period through June 15 from Feb. 15.

“What the debtors really are seeking is an extension of exclusivity as a means to suppress plan alternatives from the senior creditors in their Chapter 11 cases,” the bank said in its objection.

Citibank claims that the debtors’ strategy has been to hold the revolving credit facility parties “hostage to the protections” of their cases as they push forward on their proposed plans of reorganization that the debtors entered into prior to the start of the cases with an ad hoc group of bondholders.

“Although the debtors and the RCF agent have disagreed on many points throughout the Chapter 11 cases, what should be readily apparent to all involved is that rather than engaging with the RCF parties on any alternative capital structures to those contained in the proposed plans, the debtors have hidden behind their restructuring support agreement and their plan exclusivity to thwart any other meaningful alternatives to the proposed plans,” Citibank said.

“Thus, rather than acting as the fiduciaries they that they are supposed to be, by ensuring that the RCF parties have a proper seat at the negotiating table, the debtors used their first 120 days of the Chapter 11 cases to cede increasing amounts of power to the ad hoc group in a manner that serves to inhibit (rather than promote) consensus building.”

A hearing is scheduled for Jan. 11.

Valaris is a London-based offshore drilling company. The company filed bankruptcy on Aug. 19 under Chapter 11 case number 20-34114.

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