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California Resources Corporation Files for Chapter 11 in Bankruptcy Court for the Southern District of Texas

Vinson & Elkins is advising California Resources Corporation (“CRC” or “the Company”) as Texas co-counsel in connection with its Chapter 11 bankruptcy filing in the United States Bankruptcy Court for the Southern District of Texas, Houston Division. CRC is an independent exploration and production company operating properties exclusively in the State of California. Also advising the Company is Sullivan & Cromwell LLP.

The Chapter 11 petitions were filed on July 15, 2020 in accordance with a Restructuring Support Agreement (“RSA”) entered into among the Company and certain of its subsidiaries, holders of approximately 84% of the Company’s 2017 term loans and 51% of the Company’s 2016 term loans, and its Elk Hills midstream joint venture partner Ares Management L.P. Subject to court approval, the pre-arranged restructuring contemplated by the RSA will eliminate over $5 billion of debt and mezzanine equity interest and consolidate the Company’s ownership of the Elk Hills power plant and cryogenic gas plant, and bolster its liquidity by $1.1 billion debtor-in-possession financing which also refinances in full its current revolving loan facility. In addition, the term lenders have agreed to backstop a $450 million equity rights offering and a $200 million second lien exit financing facility.  The Company expects to continue to operate in the ordinary course throughout the restructuring process.

The V&E team is led by partners Paul Heath, Sarah Morgan, Matthew Moran and Harry Perrin with assistance from counsel Jordan Leu, senior associate Reese O’Connor, and associates Matt Struble and Kiran Vakamudi. Also advising are partners John B. Connally IV, David Peck, Wendy Salinas, Scott Rubinsky, Tzvi Werzberger, Guy GribovMatt Dobbins and Shane Tucker; counsel Bradley Foxman and Tan Lu; senior associates Casey Downing, Kristy Fields and Jing Tong; and associates Kathryn Hastings, Kelly King, Marcus Martinez, Brandon Brunet, Liz Snyder, Austin Pierce, Erin Cusenbary, Victoria E. Berkowitz, Bryan Gividen and Devin Kerns.

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