Shearman & Sterling represented hedge fund Silver Point Finance, LLC (Silver Point) in the chapter 11 cases of U.S. Energy Systems, Inc. (USEY) and certain of its US subsidiaries. Silver Point was the first lien administrative agent and collateral agent under a $113,500,000 credit facility and the second lien collateral agent under a $29,500,000 credit facility, both entered into by GBGH, LLC (GBGH) before the commencement of the chapter 11 cases.

USEY develops clean, efficient energy sources, produces power and provides energy services. Through its subsidiary GBGH, also a debtor in the chapter 11 cases, and its wholly-owned UK subsidiary UK Energy Systems, Ltd. (UKES), USEY has gas fields and a power plant in Scotland and actively participates in the areas of exploration, production and transportation of natural gas.

Shearman & Sterling's representation included assisting Silver Point in the negotiation and consummation of GBGH's plan of reorganization (the Plan), which was confirmed by the United States Bankruptcy Court for the Southern District of New York on May 26, 2009. The Plan provided for the settlement of all prepetition claims against GBGH through the following means, among others: (i) the cancellation of all equity in GBGH; (ii) the issuance of new membership interests and warrants in GBGH; and (iii) takeback financing in the form of a $50,000,000 first lien secured, guaranteed credit facility and a $15,000,000 second lien secured credit facility on an unguaranteed basis, all effective upon the consummation of the Plan. The negotiation and implementation of the plan of reorganization and the takeback financing required extensive input from teams in New York and London. The effective date of the Plan occurred on June 9, 2009. Silver Point received its pro rata portion of the new membership interests, warrants and takeback financing.

The Shearman & Sterling team included partners Fredric Sosnick (New York-Bankruptcy & Reorganization), Patricia G. Hammes (New York-Finance), Caroline Leeds Ruby (London-Finance), Don J. Lonczak (Washington-Tax) and Iain Scoon (London-Tax); counsel Robert N. Freedman (New York-Finance); associates Jill K. Frizzley (New York-Bankruptcy & Reorganization), Debra D. Yang (New York-Finance), Karen S. Park (New York-Bankruptcy & Reorganization), Nicole Kearse (New York-Finance), Joanna P. Leung (New York-Finance), Kerri N. Silver (New York-Bankruptcy & Reorganization), Alexa J. Loo (New York-Bankruptcy & Reorganization), Will Smith (London-Tax), Lucy Keeble (London-Property), Marsili Hale (London-Finance), Randall L. Martin (New York-Bankruptcy & Reorganization) and Solomon J. Noh (New York-Bankruptcy & Reorganization); trainee James Simpson (London-Finance); legal assistant Jennifer C. Lin (New York-Bankruptcy & Reorganization) and case manager Sunita Daswani (New York-Finance).