McDermott Plan Sanctioned; Judge Criticizes Reficar’s ‘Extraordinary’ Conduct as Fatal to Arguments on Discretion, Relevant Alternative; Judge ‘Horrified’ by $152M Advisor Fees

Relevant Document: Sanction Judgment This morning, the English High Court handed down a judgment approving McDermott’s Part 26A restructuring plan. The decision follows the longest contested sanction hearing for an English restructuring plan to date, which took place over six days to Feb. 15, as reported. Justice Michael Green was highly critical of the “extraordinary” conduct of the sole challenging creditor Reficar during the trial in relation to rolling settlement negotiations. This conduct, the judge said, fatally undermined Reficar’s arguments about the relevant alternative and that the court should decline to sanction the plan on discretionary grounds. The Columbian oil refiner objected to the substantial write-down of its $996 million unsecured arbitration award and sought a settlement including equity in the group similar to that awarded to other creditors who dropped their opposition to the plan prior to the sanction hearing. The U.S. engineering group sought a three-year maturity extension for secured creditors and the extinguishment of $1.65 billion of unsecured debt using an English restructuring plan in tandem with an inter-conditional Dutch scheme known as wet homologatie onderhands akkoord, or WHOA. “At the start of the hearing I had a lot of sympathy for Reficar and the position it[...]