Overseas Shipholding Group in Successful Emergence from Chapter 11

August 5, 2014

Cleary Gottlieb represented Overseas Shipholding Group Inc.(OSG), one of the world’s largest publicly traded oil tanker companies, in its Chapter 11 bankruptcy filings and successful reorganization. The filings marked the third-largest Chapter 11 of 2012 by asset value. The company has operations in the United States, Europe, the Middle East, Latin America and Asia.

On August 5, 2014, OSG announced that it had successfully emerged from Chapter 11, just twenty months after it filed for protection in the District of Delaware. Cleary Gottlieb’s global expertise and reach facilitated OSG’s quick restructuring, which required adjusting OSG’s operations around the world and protecting OSG’s vessels in many jurisdictions. This led to the first South African recognition of a United States Chapter 11 and imposition of a moratorium in the courts of South Africa, and recognition of the Chapter 11 proceedings by the High Court of Justice in London.

Cleary Gottlieb’s restructuring teams worked seamlessly with its tax, securities, finance, corporate governance and litigation teams to construct and confirm a plan of reorganization (the “Plan”) that paid the claims of senior lenders in full, paid allowed secured and unsecured claimants in full or rendered them not impaired and returned substantial value to existing equity holders. The Plan provided for the infusion of more than $1.5 billion in new equity and $1.3 billion in exit financing, included a novel structure for the distribution of securities in the reorganized companies to ensure compliance with the citizenship limits of the Jones Act, and enabled OSG to reorganize as a competitive enterprise well-positioned to thrive in the current global economy.