Cobalt Bankruptcy Leaves Big Law in the Lurch
Houston-based oil exploration and production company Cobalt International Energy Inc. owes more than $3.5 million in legal fees to a half-dozen law firms, according to bankruptcy court filings.
December 15, 2017 at 07:43 PM
4 minute read
At least a half-dozen law firms, including some titans of the Am Law 100, are collectively owed more than $3.5 million in fees following a bankruptcy filing on Dec. 14 by Cobalt International Energy Inc.
The Houston-based oil exploration and production company began Chapter 11 proceedings in its home city this week as a result of a crushing $2.8 billion debt load, slumping oil prices and the ultimately unsuccessful $1.75 billion sale of Cobalt's operations in the oil-rich African nation of Angola, a matter in which Cobalt was advised by Baker Botts. The latter subsequently took the lead for the company as federal regulators probed Cobalt's activities in Angola.
According to a list of Cobalt's 30 largest unsecured creditors, the debtor owes nearly $2.78 million to Skadden, Arps, Slate, Meagher & Flom; nearly $1.12 million to Wachtell, Lipton, Rosen & Katz; $537,956.65 to Williams & Connolly; $79,008.60 to Gardere Wynne Sewell; $23,658.73 to Covington & Burling; and $10,533.75 to Vinson & Elkins.
Skadden is representing underwriters in class action litigation involving Cobalt, which has been sued by shareholders for allegedly misrepresenting the value of its assets in Angola, where the company has been accused of bribing local officials. The U.S. Department of Justice closed an Angola-related inquiry into Cobalt earlier this year, while a parallel civil probe by the U.S. Securities and Exchange Commission was dropped in 2015.
But securities litigation against Cobalt continues in a Houston federal court, which in June certified a class pursuing claims against the company. Williams & Connolly is counseling private equity giant The Carlyle Group LP, a key shareholder in Cobalt, as is Riverstone Holdings LLC, which is being advised by Wachtell. The firm is also representing several other parties in the litigation.
Gardere—reportedly in merger talks with Foley & Lardner—is representing Riverstone, Carlyle and more than a half-dozen other defendants in the case. Vinson has previously advised Cobalt on its operations in Angola and matters related to the Foreign Corrupt Practices Act.
Kirkland & Ellis and Houston-based solo practitioner Zack Clement—a retired Fulbright & Jaworski partner who has previously worked at Sidley Austin and Weil, Gotshal & Manges—have been retained to represent Cobalt in Chapter 11 proceedings. Neither firm has yet filed billing statements with the bankruptcy court.
Taking the lead for Kirkland, which within the past year has been busy handling a number of energy industry bankruptcies, are restructuring partners James Sprayregen, Chad Husnick, Marc Kieselstein and Brad Weiland, as well as litigation partners Gabor Balassa and Stacy Pepper. Kirkland, which recently submitted a final bill for $76.9 million in fees for its work in the bankruptcy of Caesars Entertainment Operating Co., also picked up a lead role this week in the Chapter 11 case of Houston-based fashion jewelry chain Charming Charlie Holdings Inc.
Cobalt, which said it has enough money to continue its operations in Chapter 11, raised $850 million through an initial public offering in December 2009. Securities filings at the time show that the listing generated $2 million in legal fees and expenses for Cobalt's lawyers at Davis Polk & Wardwell. Shearman & Sterling took the lead for underwriters on the offering. Cobalt's general counsel is Baker Botts and Vinson alum Jeffrey Starzec.
Earlier this month, the bankruptcies of three other energy companies left a host of large firms awaiting payments for outstanding legal bills.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllUS Law Firm Leasing Up Nearly 30% Through Q3, With a Growing Number of Firms Staying in Place
3 minute readPolsinelli's Revenue and Profits Surge Amid Partner De-Equitizations, Retirements
5 minute readAI Expected to Transform Legal Field Even More as Technologies Evolve
Trending Stories
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250