Industrial Fracking Oil Well. Photo: Robert Ingelhart

The Chapter 11 restructuring of Chesapeake Energy is promising lots of new work for a bevy of Am Law 200 firms.

A Kirkland & Ellis team led by Patrick Nash, Marc Kieselstein and Alexandra Schwarzman is representing Chesapeake as debtor's counsel, while Jackson Walker is providing local counsel to the fracking pioneer. Meanwhile, as of Monday afternoon, multiple Am Law 200 firms—Sidley Austin, Davis Polk & Wardwell, Akin Gump Strauss Hauer & Feld, Arnold & Porter Kaye Scholer, Haynes and Boone, Winstead, and Cole Schotz—have entered appearances to represent various lenders.

Chesapeake, which filed for Chapter 11 protection June 28 in the Southern District of Texas, is the second-largest provider of natural gas, the 11th largest provider of oil and natural gas liquids, and the most active driller of onshore wells. The company said in court paperwork it owes between $10 billion and $50 billion to more than 100,000 creditors.

While none of the law firms have filed any fee requests as of Monday afternoon, Chesapeake's bankruptcy has the potential to generate millions of law firm fees.

For instance, Kirkland bankruptcy partners are currently charging $1,090-$1,585, while associates are billing $595-$1,090, according to a November fee application in the Barneys New York bankruptcy.

Lawyers at Sidley Austin and Davis Polk carry a similar price tag, with hourly rates at the firms ranging from $570-$1,275 in the Boy Scouts of America bankruptcy and $690-$1,685 in the Dean Foods Co. bankruptcy, respectively.

A number of smaller firms, including Gray Reed & McGraw; the Law Office of Patricia Williams Prewitt; Andrews Myers; Miller Mentzer Walker; Perdue Brandon Fielder Collins and Mott; Liskow & Lewis; and Gieger, Laborde, & Laperouse, are also representing Chesapeake's lenders.

Kirkland, which is already a mainstay in bankruptcy courts, has in the past year led Forever 21, Barneys New York, FullBeauty Brands, Things Remembered, Destination Maternity, Pier One and Acosta, as well as energy companies including McDermott International, Vanguard Natural Resources, Jones Energy and Murray Energy through Chapter 11 proceedings in the last year.

That work has made the firm a go-to for many of the recent Chapter 11 filings in 2020. Since the pandemic, Kirkland has also landed roles in the Neiman Marcus and J.C. Penny bankruptcies, and it is reportedly counseling Macy's, satellite service Intelsat and fracking company FTS international, according to the Wall Street Journal, Bloomberg and Reuters. 

A Kirkland representative didn't respond to a request for comment Monday about its latest case.

In a press release, Chesapeake said it entered into a restructuring support agreement with its lenders and secured $925 million in debtor-in-possession financing. Some lenders have also agreed to $2.5 billion in exit financing consisting of a new $1.75 billion revolving credit facility and a new $750 million term loan, while some term loan lenders and secured noteholders agreed to backstop a $600 million rights offering when Chesapeake exits bankruptcy.

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