C&J Energy Services Announces Exit from Chapter 11 Bankruptcy

by San Antonio Attorney

C&J Energy Services, which is based in Houston, has exited from bankruptcy as a new company.

 

It made a slight change to its name, and it’s now C&J Energy Services Inc.  It exchanged a part of its control of the company to its debt holders in order to eliminate about $1.4 billion in debt.

 

C&J is one of the bigger Chapter 11 bankruptcies from the 225 energy companies in the North American region that filed within the two-year duration of the oil price slump.  Many others already have successfully completed their bankruptcy.

 

C&J, which was founded by the late Josh Comstock, filed for bankruptcy in 2016 in an effort to eliminate debilitating liabilities it took on to close what turned out as an untimely acquisition.  C&J is an example of energy companies that invested in expansion too soon and obtained excessive debt as the rise of shale ended.  As prices dropped the essential cash flow to pay heavy debt loads shrunk.

 

C&J President and CEO Don Gawick announced the emergence from Chapter 11 bankruptcy on Jan.  6.  He led the firm through the process.  The CEO joined the firm in 2010.

 

The new chairman of the board is Patrick Murray, a previous CEO of Dresser Inc.

 

The company, which is about 20 years old, hired 10,000 people in 2015, but slashed almost 4,000 in February 2016.  Since then, the company has lain off more workers but the actual numbers were not disclosed.  C&J’s operation continued during the bankruptcy.

 

The firm’s growth was stimulated in part by purchasing the businesses of Houston-based Nabors Industries.  At the time of the announcement, the price of oil was higher than $106 per barrel; by the time the transaction closed, prices had decreased to around $47.  Prices continued to fall until it dropped to $26.21 per barrel.

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