Statutory Unsecured Claimholders’ Committee of Zachry Holdings, Inc., et al.

Case Number:

24-90377

FAQs

Last Updated: November 20, 2024

This document contains information and answers to frequently asked questions (“FAQs”) related to the Chapter 11 cases (the “Bankruptcy Cases”) of Zachry Holdings, Inc. and certain of its subsidiaries (collectively, the “Debtors”), which are being jointly administered in the U.S. Bankruptcy Court for the Southern District of Texas (the “Court”).

The FAQs are intended solely for informational purposes and should not be taken as legal advice or the establishment of an attorney-client relationship. If you have questions about your legal rights, it is recommended that you consult with an attorney. These FAQs may be periodically updated to reflect developments in the Bankruptcy Cases.

VOTING DEADLINE: The voting deadline to accept or reject the Joint Chapter 11 Plan of Reorganization of Zachry Holdings, Inc. and Its Debtor Affiliates (the “Plan”) is December 12, 2024 at 4:00 p.m. (CT). You should carefully read all materials included with your ballot, including the instructions for completing and mailing your ballot. The Statement of the Official Committee of Unsecured Creditors Regarding Zachry's Proposed Plan of Reorganization can be found here. Additional information regarding the solicitation of votes on the Plan can be found below.


General Information


1. What is Chapter 11?

Chapter 11 of the Bankruptcy Code is a legal mechanism that allows companies to reorganize their operations and financial liabilities while still conducting business in the ordinary course. This process not only facilitates the company’s recovery from financial distress, but is intended to ensure fair treatment of creditors in accordance with the distribution priorities outlined in the Bankruptcy Code.

An entity that seeks bankruptcy protection under Chapter 11 becomes known as a “debtor” and usually remains in charge of its own operations for the duration of the Chapter 11 case, in which case it is referred to as a “debtor-in-possession.” The Debtors in these Bankruptcy Cases filed voluntary petitions for Chapter 11 protection on May 21, 2024. The Debtors continue to operate the businesses as debtors-in-possession under 11 U.S.C. §§ 1107 and 1108.

General information about how bankruptcy works can be found on the website of the United States Courts, accessible at https://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics.

2. What is the Committee and what is its role in the Debtors’ Bankruptcy Cases?

The U.S. Trustee, a division of the U.S. Department of Justice with certain oversight over bankruptcy proceedings, may appoint an official committee to represent unsecured creditors in Chapter 11 cases.

According to the Bankruptcy Code, committees have the authority to advocate for unsecured creditors, investigate companies operating under Chapter 11 protection, and facilitate communication with their constituents, among other things.

On June 4, 2024, the U.S. Trustee for the Southern and Western Districts of Texas formed the committee of unsecured creditors in these Bankruptcy Cases (the “Committee”) and appointed representatives from seven entities holding claims against the Debtors to serve as its members.

The Committee has played and will continue to play an important role in the Bankruptcy Cases, focusing on advocating for the collective interests of unsecured creditors, which includes vendors and subcontractors of the Debtors. The Committee engages in regular communication with its advisors and conducts weekly meetings to make informed strategic decisions.

3. What is Proskauer’s role in these cases? Can Proskauer represent me or my company?

Proskauer Rose LLP (“Proskauer”) serves as legal counsel to the Committee and as such represents the collective interests of unsecured creditors in the Bankruptcy Cases. Proskauer does not and may not represent unsecured creditors individually or provide individualized legal advice.

However, Proskauer is available to answer general questions about the Bankruptcy Cases and provide information to unsecured creditors. Any inquiries should be directed to the Committee via the Committee’s online inquiry form, which may be accessed here. Moreover, as legal counsel to the Committee, Proskauer is working to resolve a number of issues implicating the collective interests of unsecured creditors in these Bankruptcy Cases.

4. Does the Committee have other advisors?

The Committee has engaged Huron Consulting Services LLC (“Huron”) as its financial advisor, and Gray Reed as Co-Counsel, and may retain other professional services firms if necessary. Proskauer, Gray Reed, and Huron play central roles in advising the Committee and furthering the interests of its constituency.

5. How can I attend court hearings in the Bankruptcy Cases?

If you wish to be heard, it is advisable to retain an attorney to represent your interests. However, if you simply wish to listen to the proceedings, you may do so by following the instructions provided on the Court’s website.


The GPX Settlement


6. What is the GPX Settlement?

Prior to the Bankruptcy Cases, the Debtors were selected to serve as lead contractors of the Golden Pass Project in Sabine Pass, Texas (the “GPX Project”).

The Court recently approved the terms of a global settlement of disputes related to the GPX Project (the “GPX Settlement”) on a final basis. The GPX Settlement allows the Debtors to exit from the GPX Project and involves, in addition to the Debtors, Golden Pass LNG Terminal LLC (“Golden Pass”), Chiyoda International Corporation (“Chiyoda”), CB&I LLC (“CB&I”), and the hybrid joint venture formed by CB&I, Chiyoda, and ZII (the “CCZJV”). Under the terms of the GPX Settlement, the Debtors will withdraw from their contracts with Golden Pass, Chiyoda, and CB&I and will have no further responsibility regarding the GPX Project. Golden Pass, Chiyoda, and CB&I will complete the GPX Project upon the Debtors’ withdrawal.

A key component of the GPX Settlement is that Golden Pass agreed to pay, subject to a cap, obligations owed by the Debtors to vendors and subcontractors working on the GPX Project. This includes the Debtors’ share of obligations incurred by (A) the CCZJV, and (B) the Debtors’ joint venture with McDermott International Inc. (the “MZJV”).

7. What was the Committee’s role in the GPX Settlement?

The Committee actively participated in the mediation sessions that culminated in the GPX Settlement and was in constant communication with all key parties to encourage an agreement that benefited general unsecured creditors. The Committee believes the GPX Settlement is highly beneficial to general unsecured creditors as a whole and therefore submitted a statement in support of approval to the Court, which you can view here. The GPX Settlement was approved by the Court on a final basis on August 12, 2024.

8. How do I request payment in connection with the GPX Settlement?

If you are a subcontractor or vendor of the Debtors that has provided goods or services in connection with the GPX Project, the Committee encourages you to: (A) file a proof of claim form by no later than September 16, 2024, at 5:00 p.m. CT, and (B) contact Golden Pass (via e-mail) and/or the Debtors (via e-mail) to determine whether your claim has specifically been scheduled for payment pursuant to the GPX Settlement.

9. I am a vendor or subcontractor of the Debtors in connection with the GPX Project. What will happen to my contract or lease?

Pursuant to the GPX Settlement, a significant number of vendor and subcontractor agreements and leases will be assigned to Golden Pass, Chiyoda, and/or CB&I as the parties responsible for completing the GPX Project, meaning that those agreements will continue in effect.

However, not all agreements will be assigned. Those not assigned may instead be rejected by the Debtors, meaning that the relevant goods or services would no longer be employed in the GPX Project.

In either case, all counterparties should receive notice of the status of their agreements. Additionally, the Debtors have filed motions with the Court listing the contracts and leases the Debtors seek to have assumed and assigned, and which will be rejected.

To date, the Court has approved three separate motions seeking the rejection of certain unexpired leases and executory contracts (see the schedules describing the agreements that were rejected pursuant to those motions here and here, and here), and one motion seeking the assumption and assignment of certain other unexpired leases and executory contracts (see the respective schedule here).

10. If my contract or lease is being assigned, where should I send invoices for goods or services provided for the benefit of the GPX Project after the Court’s initial approval of the GPX Settlement?

The Debtors began their exit from the GPX Project on July 25, 2024, when the Court approved the GPX Settlement on an interim basis. While the Court has since approved the GPX Settlement on a final basis, it will take some time before all the contracts and leases intended for assignment to Golden Pass, CB&I, and/or Chiyoda are formally assigned.

In the interim, GPX Project vendors and subcontractors should continue to send invoices to their point of contact with the Debtors, but also copy Golden Pass (via e-mail) when doing so.

11. After my contract or lease is formally assumed and assigned, where should I send invoices going forward?

The Debtors will provide vendors and subcontractors with notice of any proposed assignments. Each of the notices should identify the relevant point of contact to submit invoices within Golden Pass, CB&I, and/or Chiyoda.

12. Would vendors or subcontractors breach any confidentiality restrictions in their respective agreements if they share information with Golden Pass, Chiyoda, or CB&I before the agreements are officially assigned?

No. During one of the hearings regarding approval of the GPX Settlement, the Court authorized vendors, subcontractors, and counterparties to share information and take direction from Golden Pass, Chiyoda, or CB&I with respect to the GPX Project going forward. The GPX Settlement contains certain provisions to the same effect.

Any vendor, subcontractor, or counterparty that is nonetheless concerned about breaching confidentiality restrictions or has related questions is encouraged to communicate with the Debtors through their usual point of contact before doing so.

13. Certain vendors and subcontractors received payments from Golden Pass prior to the Court’s approval of the GPX Settlement on an interim basis on July 25, 2024. Those payments were not tied to a specific invoice. Should those payments be applied to the oldest outstanding Debtors’ invoice?

Golden Pass intends to make payments on account of specific invoices, and payments should identify the invoices to which the payment relates going forward. If there are questions about how past payments should be applied, the vendors/subcontractors may contact Golden Pass basis (via e-mail) on a case-by-case basis.


Voting on the Plan


14. What is a disclosure statement?

A disclosure statement is a document that gives creditors information about a plan. The disclosure statement and plan describe the treatment of all claims. The Debtors’ disclosure statement for the Plan can be found here.

15. What is a Chapter 11 plan?

A Chapter 11 plan is a legal contract in which a debtor agrees to pay its creditors. In a plan, all creditors are divided into "classes." A creditor in a class that will receive something under the plan will have the right to vote on the plan (unless the creditor is in a class that will be paid in full or is presumed to reject the plan). If a creditor is in a class of creditors that is not getting paid in full under the plan, then the creditor class is in an "impaired class." The Debtors' Plan can be found here.

16. How does voting on the Plan work?

On or before November 20, 2024, the Debtors will send ballots to all creditors entitled to vote (which include holders of general unsecured claims). The holders of general unsecured claims are classified in Class 5 of the Plan. The voting deadline is December 12, 2024 at 4:00 p.m. (CT). Please carefully review the instructions included with the ballot for completing and mailing your ballot.

You are urged to carefully read the Disclosure Statement and Plan included with the ballot.

If you have any questions about the procedures for voting, please contact the Claims and Noticing Agent by: (a) calling the hotline at (866) 479-8211 (US and Canada) or +1 (781) 575-2037 (International), or (b) submitting the inquiry form here.

17. What is the Committee’s position on the Plan?

The Committee strongly encourages holders of general unsecured claims in Class 5 to vote to accept the Plan. If confirmed, the Plan provides holders of Allowed General Unsecured Claims (as defined in the Plan) “payment in full in Cash” equal to the allowed amount of such claims.

For more information regarding the Committee’s position, see the Statement of the Official Committee of Unsecured Creditors Regarding Zachry's Proposed Plan of Reorganization available here.

18. Does my vote affect my recovery?

If you are a holder of an Allowed General Unsecured Claims in Class 5 of the Plan, your recovery under the Plan will not be affected by whether you vote to accept or reject the Plan, or whether you abstain from voting. However, if Class 5 votes to reject the Plan, it could impair the Debtors’ ability to confirm the Plan, and the Plan may have to be amended in a manner that would provide different or worse recoveries for holders of Allowed General Unsecured Claims.