Cases & Deals

Electricité de France negotiates settlement with GMXR

Client(s) Electricité de France

Jones Day represented Electricité de France (EDF) with regard to its exposure to GMXR, Inc., an exploration and production energy company that filed chapter 11 in Oklahoma City, Oklahoma. At the time of its bankruptcy filing, GMXR owed EDF approximately $50 million pursuant to a royalty transaction referred to as a Volumetric Production Payment ("VPP") and approximately $2 million under a series of transactions pursuant to an ISDA hedge agreement. At the beginning of the case, the DIP Lender aggressively sought to take a first priority position over all of the GMXR's assets. Jones Day litigated various objections to the DIP which were all resolved in favor of EDF thereby protecting its first priority positions under the ISDA and VPP documents.

EDF eventually terminated the ISDA hedge agreements under the safe harbor provisions of the Bankruptcy Code and Jones Day negotiated a payoff settlement agreement with GMXR. EDF was paid prior to confirmation of a plan with regard to the ISDA. In the context of the plan of reorganization, Jones Day negotiated a positive outcome for EDF with regard to the VPP. All payments were made post-petition and the VPP documents were all assumed by the reorganized debtor.