A UK court has appointed joint administrators for the drilling contractor Paragon Offshore following the driller’s application last week for administration in the United Kingdom to advance its Chapter 11 plan.
Paragon reported on Tuesday that the High Court of Justice, Chancery Division, Companies Court of England and Wales considered the company’s application for administration in the United Kingdom and granted an order appointing two partners of Deloitte LLP as administrators of the company on Tuesday, May 23.
Paragon noted that the appointment of the joint administrators is a necessary component of the consensual plan of reorganization under chapter 11 of the United States Bankruptcy Code that the company announced on May 2, 2017. Under the consensual plan, Paragon’s existing equity is deemed worthless and the company’s secured creditors and unsecured bondholders will receive equity in a new reorganized parent company.
The next major milestone in Paragon’s chapter 11 cases is the confirmation hearing scheduled to begin on June 7 in the U.S. Bankruptcy Court in Delaware. Assuming the consensual plan is confirmed, Paragon is planning for its emergence from chapter 11 in early July; however, this timing is subject to the completion of certain conditions precedent to emergence including, among other things, the reorganization of the corporate structure of Paragon and its subsidiaries.
As previously disclosed, under administration, Paragon will continue to conduct business in its normal course. Drilling contracts will continue and vendors and employees will continue to be paid. The joint administrators will assume all powers to manage the affairs of the company; however, Paragon’s existing board has agreed to remain involved in an advisory capacity to the administrators until the company emerges from chapter 11, and the existing executive management team will remain responsible for the operational management of the Paragon group.