Chapter 11 Confirmed for Hercules Offshore, Inc.
Our client Hercules Offshore, Inc., an offshore oil drilling company, was the debtor, as it liquidated in the face of an unprecedented market decline over the past several years. Hercules’ plan was opposed by an official equity committee appointed by the U.S. trustee, which argued that the company should have continued operating on a “hope certificate” until a dramatic market turnaround occurred. The equity committee raised alleged claims for breach of fiduciary duties against Hercules’ directors and officers and also objected to the conduct of Hercules’ lenders, asserting claims for equitable disallowance, equitable subordination and breach of the covenant of good faith and fair dealing.
The judge confirmed Hercules’ Chapter 11 plan, overruling each of the equity committee’s objections, and concluded that the equity committee “failed to create any doubt” that the Hercules plan satisfied all confirmation requirements. The court additionally approved all plan releases for Hercules’ officers and directors, noting the comprehensive corporate governance process employed by Hercules’ board and the Special Committee, which “reflect[ed] an intensive and thoughtful effort by management and the Special Committee to respond to the market challenges.”