Foresight Energy Completes Unique Out-of-Court Coal Company Restructuring

Paul, Weiss client Foresight Energy LP, a publicly held producer and marketer of thermal coal in the Illinois basin, completed an out-of-court restructuring of more than $1.4 billion in debt pursuant to transaction support agreements executed by the partnership, its equity sponsors - including Murray Energy Corp., Foresight Reserves LP and Mr. Christopher Cline - and a majority of the partnership's secured bank lenders and unsecured noteholders. The restructuring resolves defaults and events of default across Foresight's capital structure arising from an earlier Delaware Chancery Court determination that an April 2015 equity transaction involving the partnership's sponsors constituted a "change of control" under Foresight's unsecured note indenture. The restructuring was implemented principally through concurrent exchange and tender offers in which more than 99.98 percent of the noteholders participated. Through the tender and exchange offers, Foresight Reserves LP and certain of its affiliates purchased approximately $105 million of outstanding non-affiliate notes for cash, and the partnership exchanged the remaining notes for approximately $349 million of new second lien notes, approximately $299 million of new convertible PIK notes, and warrants to acquire up to 4.5 percent of the total outstanding units of FELP upon the redemption of the convertible PIK notes. The restructuring also provides for (1) an amendment and restatement of the partnership's secured revolving and term loan facilities, (2) an amendment and restatement of the partnership's receivables securitization facility, (3) amendments and waivers related to the partnership's material equipment leases and financings, (4) amendments and other modifications to the partnership's governance documents and agreements by and among the equity sponsors and (5) the execution of mutual releases among the participants in the restructuring.

The Paul, Weiss team included, among others, bankruptcy partner Alice Eaton; corporate partners Gregory Ezring, Brian Janson, Toby Myerson, Raphael Russo, Scott Sontag and Jordan Yarett and counsel David Carmona, Scott Grader and Stephen Koo; and litigation partners Andrew Ehrlich and Gregory Laufer.