Vinson & Elkins Pursues Narrower Role in Enviva’s Bankruptcy

Vinson & Elkins LLP is seeking a new role in Enviva Inc.'s bankruptcy weeks after a judge rejected its bid to serve as debtors’ counsel.

Enviva on Tuesday asked permission to hire Vinson & Elkins as special counsel and Paul, Weiss, Rifkind, Wharton & Garrison LLP as debtors’ counsel.

The request comes after Judge Brian F. Kenney of the US Bankruptcy Court for the Eastern District of Virginia in May ruled that Vinson & Elkins couldn’t represent Enviva in its bankruptcy because it has a longstanding relationship with Riverstone Investment Group LLC, a private equity firm that held 43% of Enviva’s publicly traded shares. Kenney declined Enviva’s request for reconsideration in July.

When Kenney rejected Vinson & Elkins’ initial employment application, he left open the possibility that the firm could represent Enviva in a different capacity under a section of the bankruptcy code that is less restrictive on conflicts of interest.

“The Court explained in the Reconsideration Order that there may nevertheless be an important role for V&E in these chapter 11 cases as special counsel under section 327(e) of the Bankruptcy Code due to its deep institutional knowledge of the Debtors,” Enviva said in a Tuesday filing.

Under 327(e), Vinson & Elkins can work on the case as long as the matters it works on don’t involve its other clients.

Under the Tuesday proposal, Vinson & Elkins will continue to work as Enviva’s company counsel, handling governance issues, regulatory filings, tax matters and other issues, according to filings.

Vinson & Elkins said it conducted “a thorough conflicts analysis” and determined none of its lawyers working in the Enviva bankruptcy has an adverse interest to Enviva on the matters they will be working on.

Paul Weiss, as debtors’ counsel, would administer Enviva’s case, draft and negotiate its reorganization plan, and help with obtaining bankruptcy financing, according to filings.

Vinson & Elkins narrowed the scope of its representation after talking to the US Trustee, the Justice Department’s bankruptcy watchdog, it said. Enviva and the two firms will coordinate to “avoid unnecessary duplication,” Enviva said in a filing.

Vinson & Elkins would be of value to the case because of its deep institutional knowledge of Enviva formed over “the course of a decade” as the company’s corporate counsel, Enviva said. “In this respect, retaining V&E will avoid unnecessary administrative expenses and delays, result in cost and case efficiencies, and will assist in maximizing value for all stakeholders.”

Vinson & Elkins and Paul Weiss each charge more than $2,000 an hour for their top attorneys.

The case is Enviva Inc., Bankr. E.D. Va., No. 24-10453, 7/30/24.