Item 7.01 Regulation FD Disclosure
As previously reported, on February 14, 2016, Paragon Offshore plc (
Paragon
) and certain of its subsidiaries (collectively, the
Debtors
) filed voluntary petitions for relief under chapter 11 of the United States Bankruptcy Code (the
Bankruptcy Cases
) in the United States Bankruptcy Court for the District of Delaware (the
Bankruptcy Court
). On May 2, 2017, the Company announced that the Company has reached an agreement in principle with a steering committee of lenders under Paragons Senior Secured Revolving Credit Agreement maturing July 2019 (the
Revolver Lenders
), an ad hoc committee of lenders under Paragons Senior Secured Term Loan Agreement maturing July 2021 (the
Term Lenders
, and together with the Revolver Lenders, the
Secured Lenders
) and the Unsecured Creditors Committee to support a new chapter 11 plan of reorganization for the Debtors (the
Consensual Plan
). Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Consensual Plan.
On May 2, 2017, the Company filed the Consensual Plan and related disclosure statement (the
New Disclosure Statement
) with the Bankruptcy Court. Copies of the Consensual Plan and the New Disclosure Statement are attached hereto as
Exhibits 99.1
and
99.2
, respectively. The Consensual Plan provides for, among other things, the following recoveries to creditors: (i) to the Secured Lenders, (a) $410 million in cash, (b) $85 million in new senior secured first lien term loans, (c) 50% of the equity interests in Reorganized Paragon (subject to dilution by equity interests issued pursuant to the Management Incentive Plan), (d) 50% of the ownership interests in the Litigation Trust entitled to a preferential right of recovery from the first $10 million of assets of the Litigation Trust (after giving effect to the repayment of Reorganized Paragons loan to the trust), and (e) 25% of the ownership interests in the Litigation Trust entitled to distribution of the remaining assets of the Litigation Trust (after giving effect to the repayment of Reorganized Paragons loan and distribution of the $10 million preference described in the preceding clause (d)); (ii) to the Senior Noteholders, (a) $105 million in cash, (b) 50% of the equity interests in Reorganized Paragon (subject to dilution by equity interests issued pursuant to the Management Incentive Plan), (c) 50% of the ownership interests in the Litigation Trust entitled to a preferential right of recovery from the first $10 million of assets of the Litigation Trust (after giving effect to the repayment of Reorganized Paragons loan to the trust), and (d) 75% of the ownership interests in the Litigation Trust entitled to distribution of the remaining assets of the Litigation Trust (after giving effect to the repayment of Reorganized Paragons loan and distribution of the $10 million preference described in the preceding clause (c)); and (iii) to holders of general unsecured claims (other than the Senior Noteholders), each holders
pro rata
share of cash in an amount equal to the lesser of (a) 30% of the amount of such holders general unsecured claim and (b) $5 million. Existing shareholders will not receive a recovery under the Consensual Plan.
Attached as
Exhibit 99.3
to this Current Report on Form 8-K is a copy of Paragons press release, dated May 2, 2017, announcing the filing of the Consensual Plan and the New Disclosure Statement.
In accordance with General Instruction B.2 of Form 8-K,
Exhibits 99.1
,
99.2
and
99.3
shall not be deemed filed for the purposes of Section 18
of the Securities Exchange Act of 1934 (the
Exchange Act
) or otherwise subject to the liabilities of that section, nor shall
Exhibits 99.1
,
99.2
and
99.3
be deemed incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Cautionary Note Regarding Forward-Looking Statements
This release contains forward-looking statements that involve certain risks, uncertainties and assumptions. These include but are not limited to risks associated with the Companys reorganization, the ability of the Company to implement the transaction contemplated by the Consensual Plan in Bankruptcy Court, the general nature of the oil and gas industry, actions by regulatory authorities, customers and other third parties, and other factors detailed in the Risk Factors section of the Companys annual report on Form 10-K for the fiscal year ended December 31, 2016, and in its other filings with the Securities and Exchange Commission (the
SEC
), which are available free of charge on the SECs website at www.sec.gov. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated.
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