For more information on Gulfport Chapter 11, see www.gulfportenergy.com/restructuring. Court documents and information on the claims procedure are available at dm.epiq11.com/Gulfport. Please email questions to the company representative at GulfportInfo@epiqglobal.com or by phone at (888) 905-0409 (free) or (503) 597-7687 (international). The deterioration in costs, disruptions and value, inherent in the ongoing Chapter 11 procedures, has led in recent years to faster, often, if not pre-packaged, at least pre-negotiated (or previously agreed) cases. Demanding debtors and stakeholders are increasingly using Plan Assistance Agreements (PSAs), also known as restructuring assistance agreements, to structure a Chapter 11 case and define the terms of a chapter 11 plan negotiated in advance. The EPI is a contract before or after agreement reached by the debtor and certain major creditors, usually immediately prior to the declaration of insolvency, under which the debtor and his creditors agree to support a proposed Plan under Chapter 11, subject to certain conditions. PSA can help reduce the costs, duration and negative publicity associated with a bankruptcy application by ensuring to the market, including potential lenders or investors, that the debtor leaves bankruptcy without disturbing the debtor`s employees, customers or partners too much. At the same time, a debtor who takes a PSA with less than all the key players could be a recipe for litigation. In summary, PSA can be very useful for a debtor when it comes to organizing a restructuring plan and reducing differences of opinion in the event of bankruptcy. These cases indicate that the courts will approve an EPI if it is the result of a good faith effort to restructure, if it is not to exclude alternatives, and if it complies with the value maximization guidelines of the Bankruptcy Act. Elements such as a robust marketing process, an agent and the support of the debtor`s principal creditors are clearly important.
PPE is a useful tool for bringing security and order to the process, but they remain subject to the material requirements of the Bankruptcy Act and the proper exercise of a debtor`s fiduciary duties. As a result, depending on the agreement of shareholders and creditors, the entity may sell its assets, restructure its financial agreements, issue equity to reduce its debt, or go bankrupt, as it operates. Below are two examples of corporate restructuring in which one has been restructured, carried out by private equity and the other by bankruptcy.