Practice/Industry Group Overview
Sutherland's energy bankruptcy practice unites our energy industry knowledge with skilled bankruptcy attorneys to protect the rights of our clients.
Sutherland's Energy Bankruptcy and Creditors' Rights team brings together our decades of experience in all aspects of the energy business with our highly knowledgeable bankruptcy lawyers to protect the interests of our clients in what are inevitably complicated proceedings.
In addition to the disposition of physical assets involved in energy bankruptcies, we are adept at ensuring our clients maximize the value of their forward and futures contracts, options, and swap, netting and tolling agreements with debtors in bankruptcy. In addition, our attorneys are highly skilled in all manner of insolvency resolutions, whether the troubled counterparty is simply liquidating or going through complex restructuring.
We thoroughly understand every type of dispute resolution that creditors and debtors may require to protect their rights to the fullest. Knowing the energy industry allows us to properly assess the debtor's situation and adopt the ideal strategy to address it. This helps ensure that our client gets the optimal treatment from whatever proceedings are appropriate for the matter in question.
Industry experience. The energy industry offers unique challenges to parties involved in bankruptcies. Not only are there complex physical assets to manage, but also there are often a vast array of financial instruments and commitments, the value of which can run into the billions of dollars. Moreover, the regulations governing the energy industry add another layer of complexity to these situations that requires special attention to protect the rights of our clients.
Bankruptcy acumen. Sutherland's attorneys have years of experience in bankruptcy proceedings. From a simple liquidation to the cross-border reorganization of a huge player in the energy trading business, our attorneys have a track record of serving clients effectively and diligently.
Counterparty engagements. Our lawyers in the energy bankruptcy group have spent years dealing with the various ways of settling bankruptcy matters. Often, we can secure the interests of our clients through negotiations with their counterparty. We are experienced in mediation if that is an appropriate mechanism. The same holds true if arbitration or litigation is preferable. Moreover, our many years of experience enable us to assess our strategic options for the benefit of our clients.
Regulatory familiarity. Energy firms operate in a highly regulated market, and their financial operations are covered by several different authorities. Under normal business conditions, these can prove difficult to navigate. In bankruptcy situations, they become fundamental to the interests of our clients. We have represented clients not only in bankruptcy courts but also before FERC, CFTC and other regulatory bodies. This helps ensure that no stone goes unturned in protecting our clients' interests.
Breadth. Our energy bankruptcy group offers a niche service to our clients. However, it is an integral part of our overall service and not a separate, distinct operation. Our clients experience continuity from one legal matter to the next that ensures fast and effective advocacy and dispute resolution.
Nuts and Bolts
Our energy bankruptcy and creditors’ rights services include:
- Procedures for terminating and liquidating forward physical and financial positions and tolling agreements
- Valuation of physical natural gas, power, crude oil and product forward positions, tolling agreements and financial swaps, derivatives and options
- Determining whether specific contracts qualify as forward contracts or swap agreements
- Determining whether counterparties qualify as forward contract merchants or swap participants
- Enforceability of setoff and netting issues
- Credit support, collateral and guarantee issues
- Litigating with bankruptcy estates regarding propriety of terminations and liquidations, liquidation valuation, setoff, preference and fraudulent conveyance actions
- Negotiating, arbitrating, and litigating with counterparties on forward contracts, swaps, tolling and other trading agreements
- Developing and analyzing valuation of trade positions
- Counseling clients on liquidating and/or selling energy trading portfolios
- Advising large energy trading company regarding wind down of its trading portfolio prior to bankruptcy
- Enforceability of limited two-way/one-way termination provisions
- Automatic stay, preferences and fraudulent conveyance issues
- Post-confirmation trusts in litigation and claims actions
- Developing all model documentation for an energy marketing company re-entering the trading market, including:
- ISDA master agreement
- Credit support annex
- EEI master power purchase & sale agreement
- Netting agreements
- Gas master agreements
- Oil master agreements
- Analyzing counterparty trading contracts, including:
- Forward contracts
- Swap agreements
- Options involving energy-related commodities
Sutherland's energy trading clients can protect their interests in bankruptcy situations by relying on our unique blend of energy industry experience, knowledge of bankruptcy law as it applies to the complex financial instruments common in the energy business and our familiarity with the regulatory landscape. This facet of our practice is positioned at the nexus of these three areas to provide effective and practical strategies for resolving such matters.
Sutherland represents South Mississippi Electric Power Association in power plant acquisition complicated by a bankruptcy.
We supported this generation and transmission cooperative in an acquisition of a power plant. This plant was an asset held by a bankrupt entity, complicating what would otherwise have been a straightforward purchase.
Sutherland represents numerous energy trading creditors in Lehman Brothers bankruptcy.
We represented no fewer than 13 energy trading clients in counterparty suits and trading disputes resulting from the Lehman bankruptcy. A great many cases needed addressing simultaneously, and we are particularly proud of our ability to manage these cases and the tight deadlines involved.
Several energy trading creditors in the SemGroup bankruptcy represented by Sutherland.
We represented several energy trading clients in counterparty suits and trading disputes in the fallout of the SemGroup bankruptcy. SemGroup is estimated to have lost $2.4 billion trading oil futures. Our long-standing experience in energy bankruptcies serves clients well in disputes of this magnitude.