New Fortress Energy's indirect subsidiaries have stepped into U.S. bankruptcy court, asking judges to sign off on a creditor-backed restructuring that a London court has already approved. The plan would swap most of the company's debt for new securities and spin off its Brazil operations, putting fresh scrutiny on New Fortress founder and chairman Wes Edens, the Milwaukee Bucks co-owner at the center of an international rescue effort aimed at keeping the LNG operator running for customers and lenders.
According to the Milwaukee Business Journal, two PlanCos tied to New Fortress filed Chapter 15 petitions in the U.S. Bankruptcy Court for the Southern District of New York. The move is part of a push to have U.K. court-sanctioned restructuring plans recognized in the United States. The Business Journal reports the filings follow a string of creditor agreements and U.K. hearings that New Fortress and its lenders have used to reshape the balance sheet without launching a full Chapter 11 case in this country.
What the filings would do
The restructuring would turn most of the outstanding claims into new equity and preferred securities, with creditors said to be owed about $6.5 billion, according to Bloomberg. As described in the company's proxy statement filed with the SEC, the proposal would divide New Fortress into a CoreCo and a BrazilCo, create roughly $2.46 billion of CoreCo convertible preferred stock, and leave supporting creditors with a majority stake in the reorganized CoreCo if the plans win approval.
Why a U.K. plan and Chapter 15 in New York?
Company lawyers and market watchers say the group is using the U.K.'s Part 26A restructuring process to lock in creditor votes, then turning to a U.S. court under Chapter 15 so the outcome is enforceable on this side of the Atlantic. Industry coverage notes that the PlanCos filed Chapter 15 petitions specifically to convert U.K. High Court approvals into enforceable U.S. orders, as laid out by 9fin.
Local angle: Bucks owner and what this means
Wes Edens, who co-founded New Fortress and serves as its chairman, is better known in Milwaukee as one of the Bucks' principal owners. ESPN documents the 2014 purchase of the team. New Fortress's proxy materials say the restructuring will be carried out through two PlanCos, and that the company and its other subsidiaries do not expect to be parties to the U.K. proceedings or to the U.S. Chapter 15 recognition process. That language signals that Bucks-related assets and other local operations are not being swept into a U.S. in-court bankruptcy, even though lenders would end up controlling equity in the restructured CoreCo if the plans proceed.
Next steps and what to watch
The proxy materials state that the PlanCos will seek a scheduling order and have asked the court to set a recognition hearing, with the company indicating it is aiming for a June 23 hearing date. A case website is expected to host filings for creditors and other stakeholders. Key milestones include U.K. High Court sanctioning of the plans, the Southern District of New York's recognition decision, and the satisfaction of regulatory approvals and creditor conditions. Any of those steps could either fast-track or derail the deal. Early reporting characterizes the proposal as a creditor-led swap with broad lender backing, according to Bloomberg.
