Bankruptcy Law

Chesapeake Approved to Exit Bankruptcy, Cut $7 Billion in Debt

Jan. 14, 2021, 12:46 AM

Chesapeake Energy Corp. won court approval for a reorganization plan that slashes about $7 billion in debt in exchange for handing over ownership to its senior lenders, including Franklin Resources Inc.

The decision by U.S. Bankruptcy Judge David Jones caps a years-long effort to repair the company’s finances, which became bloated after repeated borrowing to fuel its expansion.

The final push came over the objection of unsecured bondholders and other lower-ranking creditors, who claim senior lenders were getting Chesapeake at a discount just six months after they refinanced their debt.

Jones rejected those complaints along with a last-minute, competing reorganization...

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