Freshfields Restructuring Expert leads the successful Dutch WHOA proceedings of McDermott

Amsterdam based Freshfields partner, Michael Broeders, was appointed on 10 October 2023[1]  by the Amsterdam Court as Restructuring Expert (herstructureringsdeskundige) to take over the conduct of the WHOA restructuring proceedings of McDermott, an international EPC contractor active in the energy industry. 

The Amsterdam Court appointed Michael Broeders following objections against the restructuring plan initially envisaged by McDermott. Objections to the company’s proposal were raised by Reficar (a subsidiary of Colombian oil company Ecopetrol), that had secured a US$1.3 billion arbitration award against McDermott in June 2023, as well as a group of secured lenders. The Amsterdam Court had indicated that it could not exclude that these objections would prevent it from sanctioning the plan as initially envisaged by McDermott. 

Following a period of extensive negotiations and a request to the Amsterdam Court for a preliminary decision on certain aspects of the contested plan,[2] the WHOA restructuring plan was amended to address the objections and was subsequently proposed by the Restructuring Expert to McDermott’s creditors. The amended WHOA restructuring plan provides for a worldwide restructuring of McDermott via a debt/equity swap of Reficar’s arbitral award claim and an amendment and extension of the existing secured debt facilities, extending the maturities by three years to 2027. 

The amended WHOA restructuring plan proposed by the Restructuring Expert is widely supported and no creditor contested its sanctioning. Only 6 days after the sanctioning hearing, held on 15 March 2024, the Amsterdam Court today sanctioned the amended WHOA restructuring plan. 

The sanctioning of the WHOA restructuring plan of McDermott follows the sanctioning of the parallel restructuring plan of McDermott’s English subsidiary, CB&I UK Ltd., on 27 February 2024. In exercising its discretion to effect a cross class cram down, the High Court strongly relied on the enhanced consideration being offered to Reficar as part of the WHOA restructuring plan as proposed by the Restructuring Expert. 

The Freshfields team that advised Michael Broeders in his capacity as Restructuring Expert consisted of restructuring partners Lindsay Hingston, Craig Montgomery, Madlyn Primoff and Scott Talmadge; litigation partner Mijke Sinninghe Damsté; and associates Bas Kramer, Huub Boekhorst, Juliette Willems, Anne Zwolsman, Daniël van Loggerenberg, Thies de Kroon, Jorn Homan, Alex Thomson, Jamie Murray-Jones and Eleni Rawson.

The Freshfields team worked side by side with the PwC team acting as financial advisor to the Restructuring Expert, led by Peter Wolterman, and worked closely with counsel to the company and counsel to the various other stakeholders to achieve this result. 

[1] See Amsterdam District Court 10 October 2023, ECLI:NL:RBAMS:2023:6481, JOR 2024/45.

[2] See Amsterdam District Court 12 February 2024, ECLI:NL:RBAMS:2024:1057.