Proterra Emerges From Chapter 11

Paul, Weiss obtained court approval for client Proterra Inc.’s chapter 11 plan of reorganization, allowing the electric vehicle manufacturing company to emerge from bankruptcy. The plan results in the deleveraging of Proterra’s balance sheet through the repayment and equitization of approximately $200 million in funded debt following a multi-track sale process for its multiple business lines. U.S. Bankruptcy Judge Brendan Shannon of the District of Delaware, who oversaw the company’s chapter 11 case, approved Proterra’s bankruptcy plan after overruling multiple shareholder objections. Proterra exited bankruptcy under new ownership with substantial cash on its balance sheet and no funded debt obligations.

Proterra’s pre-bankruptcy business was comprised of three distinct business lines: Proterra Powered, which produced batteries for electronic vehicles; Proterra Transit, which manufactured and sold electric buses; and Proterra Energy, which produced bus-charging equipment and related enterprise-level software solutions. Proterra engaged in a postpetition multi-track bidding process for each of these business lines during its chapter 11 cases, ultimately selling the Proterra Powered business line for approximately $210 million plus the assumption of certain liabilities, and the Proterra Transit business line for approximately $10 million plus the assumption of certain liabilities. Proterra Energy was retained by the reorganized Proterra under its chapter 11 plan, which provides for the distribution of 100% of reorganized Proterra’s equity to existing second lien convertible noteholders and a meaningful recovery to holders of unsecured claims.

The Paul, Weiss team included restructuring partners Paul Basta, Robert Britton and Kyle Kimpler; corporate partners Austin Pollet, John Kennedy, Raphael Russo, David Huntington and Sung Pak, and counsel Andrea Quek, Lyudmila Bondarenko, Nathan Mitchell, Adam Longenbach and Patricia Vaz de Almeida; litigation partners William Clareman, Andrew Ehrlich and John Carlin, and counsel Paul Paterson, Steven Herzog and Robert Kravitz; executive compensation partners Rebecca Coccaro and Jean McLoughlin; tax partners Robert Holo and Anne McGinnis; intellectual property partner Jonathan Ashtor and counsel Elana Bensoul; real estate partner Salvatore Gogliormella; antitrust partner Scott Sher and counsel Yuni Sobel and Marta Kelly; environmental counsel William O'Brien; and international trade counsel Richard Elliott.