Osyka Corporation

Osyka Corporation is a private Houston-based oil and gas company that specialized in the exploration of, and production from hydrocarbon producing fields in Southern Mississippi, the gulf-coast of Texas and Louisiana.

In the late fall of 2006, Goldman Sachs – Osyka's secured lenders – declared the Company in technical default of the terms of its credit facility, using that opportunity to impose default provisions designed to force Osyka to divest their assets or file for bankruptcy protection. Osyka's financial strain was exacerbated by its obligations under a hedge contract.

In addition, Osyka faced other real challenges – its largest asset was a non-operating interest (which makes the property of much less interest to buyers), most of the asset value was associated with heavy sour crude (again, a negative), and many of the properties were small (another negative). Prior to engaging Gordian in April 2008, Osyka engaged two different investment banking firms to market and sell all or substantially all of the Company's assets. Both of these prior efforts failed.

Osyka filed for Chapter 11 bankruptcy protection in March 2008, and Gordian was engaged shortly thereafter. Goldman Sachs acted as the Stalking Horse bidder in the bankruptcy auction – credit bidding the majority of its secured claim – with the bidding procedures already entered into before Gordian became engaged by Osyka.

Gordian, with the assistance of Debtors' counsel, was instrumental in obtaining an extension to the bid deadline. As a direct result of our efforts, a third party submitted a qualified overbid. In turn, when Goldman Sachs challenged the bona fides of such qualified overbid, Gordian also played a critical role in the subsequent phase of dispute resolution, in which the high third party bidder increased its overbid by approximately 14% from its initial bid. Finally, Gordian was able to deliver another purchaser to the table that paid substantially more for one of Osyka's non-core properties than the other high bidder was willing to pay.

By orchestrating a robust sale process, and navigating the Debtor through the various challenges inherent in this sale process, Gordian was able to deliver two bidders to the table whose combined bid exceeded that of the Stalking Horse by approximately 20%, despite the many negative attributes of the Company's assets and the time and other exigencies in the bidding procedures inherited by Gordian.

Not only did Osyka benefit from the increased purchase price that Gordian was able to help achieve, but Osyka was also able to capture a greater allocation of its excess cash collateral than otherwise would have been realized without Gordian's assistance (per a contractual agreement with Goldman Sachs, Osyka was able to share in a materially greater amount of cash collateral if the Company was sold to a third party bidder).

Thus, notwithstanding all of the hurdles throughout this engagement, Gordian was able to conduct a highly successful marketing process that maximized the value of the Debtors' assets and resulted in a significant increase in value to the estate.