Nine Energy Service: Prepack Equitizes Secured Notes

Nine Energy Service filed chapter 11 on February 1, 2026 to implement a prepackaged balance-sheet reset in Houston, and the case moved to March 4 confirmation and a March 5 effective date in little more than a month. The restructuring cut about $320 million of secured debt, transferred ownership to the senior secured noteholders, refinanced the asset-based facility, and left general unsecured creditors unimpaired. The Confirmation Order and Effective Date Notice closed the case on the timetable the debtors had outlined at filing.

Nine entered chapter 11 with limited cash, a new White Oak-led ABL already in place, and a capital structure built around 13% secured notes. Management said in its filing-day announcement that the objective was to preserve operations and vendor relationships while equitizing the notes. By confirmation, the remaining disputes centered on third-party releases, the request to waive the Rule 3020(e) stay, and a litigation carve-out for NCS Multistage.

Debtors	Nine Energy Service, Inc. (10 jointly administered debtors)
Court	U.S. Bankruptcy Court, Southern District of Texas (Houston Division)
Case Number	26-90295
Petition Date	February 1, 2026
Confirmation Date	March 4, 2026
Effective Date	March 5, 2026
Judge	Hon. Christopher M. Lopez
DIP Facility	$125 million DIP ABL with full roll-up of prepetition ABL claims

The Prepack Put the Secured Notes in Control

The debtors filed the plan and disclosure materials on day one and moved under a Scheduling Order that set solicitation, voting, and confirmation on a compressed calendar. By the time the Voting Report was filed on March 3, the remaining contested class was the senior secured notes class. Epiq reported that Class 4 accepted the plan by 292 ballots and $230.2 million, or 81.56% by number and 99.14% by amount, while general unsecured creditors were left unimpaired and did not need to vote. The debtors reached confirmation in early March and effectiveness the next day.

The Sirkes confirmation declaration says the debtors had backing from all prepetition ABL claims and more than 70% of the senior secured notes before they filed. That support let solicitation start before chapter 11 and kept the class structure narrow at confirmation. The filing functioned as the court-supervised closing step for a transaction that had already been negotiated.

The Amended Plan kept the case architecture simple. DIP claims were paid on the effective date through pro rata loans under the exit ABL facility. Other secured, priority, and prepetition ABL claims were treated as unimpaired or paid in full. The senior secured notes received all new equity, subject to dilution, while existing equity interests and section 510(b) claims were canceled.

The Cunningham Declaration put the plan's valuation support at roughly $185 million to $240 million of enterprise value and about $112 million to $167 million of implied equity value, assuming approximately $73 million of net debt at the projected March 31 effective date. Those ranges put the senior secured notes at the fulcrum and align with the company's statement that the transaction would cut about $320 million of debt. NYSE Regulation said in its delisting notice that the common stock would be canceled in the reorganization.

The debtors did not need a committee settlement to carry unsecured creditors through the case, and they did not need a late valuation reset to hold the noteholder deal together. Once Class 4 voted in favor, the remaining step was to convert the DIP into the exit facility without another month in chapter 11. The stay waiver in the confirmation order allowed that timing.

White Oak's DIP and Exit ABL Bridged the Case

The DIP Motion sought a $125 million senior secured superpriority revolving DIP ABL facility led by the prepetition ABL lenders, with White Oak Commercial Finance as agent. The debtors paired that request with a Latif declaration that described the DIP as a bridge into a $135 million exit ABL and laid out the pricing package: SOFR with a 1.50% floor plus 4.00%, a 0.50% unused fee, a 1.50% arrangement fee, a $10,000 monthly collateral-monitoring fee, and a full roll-up of the prepetition ABL obligations. Judge Lopez later entered the Final DIP Order, and Law360 reported final approval just ahead of confirmation.

The final order set milestones requiring entry of the final DIP order and the confirmation order by March 16, 2026 and occurrence of the effective date by March 31, 2026. Nine beat each of those dates. The order limited use of proceeds to the approved budget, working capital, chapter 11 costs, professional fees, the carve-out, and the ABL refinancing, and it set a lender-challenge deadline for any official committee or other party in interest. No committee had been appointed as of the final DIP order.

White Oak's position in the restructuring was also the culmination of financing steps the company had taken before chapter 11. Nine disclosed in a May 1, 2025 8-K that it had entered a new $125 million ABL credit agreement with White Oak, and ABF Journal reported that the facility included a $50 million accordion and replaced the prior revolver. By the time the bankruptcy filing arrived, the same lender group was positioned to provide the DIP and then carry the company into its exit facility.

The DIP terms also gave the lenders a tight grip on timing and collateral. The facility included a letter-of-credit fee, an early termination premium that stepped down over time, and budget-based controls on cash use. That is typical of a lender-led prepack, but here it also reflected how little room Nine had for a long stay in chapter 11. The company was not using the court process to shop for a fundamentally different capital structure. It was using the court to implement a deal that White Oak and the noteholders were already willing to fund.

Pricing Pressure and Leverage Set Up the Filing

Nine entered chapter 11 as a publicly traded oilfield-services company focused on completion tools, cementing, coiled tubing, and wireline work. The First Day Declaration says the business employed about 1,100 full-time employees and about 30 independent contractors, and operated from Houston with additional international reach, including an R&D presence in Norway. Public company materials described Nine as an onshore completions provider serving North American shale basins. The declaration ties the filing to capital structure pressure, not to an immediate shutdown of operations.

The external operating picture had been weakening for months. Nine reported 2024 revenue of $554.1 million, then disclosed in its March 31, 2025 10-Q that total debt was $349.3 million against $17.3 million of cash. Later in 2025, the company reported Q3 revenue of $132.0 million, alongside continued pricing pressure and weaker customer activity in several basins. Those figures are not catastrophic on their own, but they were not enough to make a 13% secured notes stack easy to carry.

The credit market saw the same trend. S&P cut Nine to CCC- on January 27, 2026, citing deteriorating liquidity before the petition date, and then downgraded the company to D on February 2, 2026 after the bankruptcy filing. The first day record ties the restructuring to an overleveraged balance sheet, high interest expense, and weak industry conditions that limited the company's ability to reinvest or participate in consolidation. The filing followed the 2025 ABL refinancing, thinner liquidity, and continued pressure on the capital structure.

Nine disclosed in a May 2025 listing notice that it had fallen below the NYSE's $1.00 minimum share-price standard, creating a six-month cure period. Once the chapter 11 filing arrived, NYSE Regulation moved to suspend trading and begin delisting. The listed shares were headed toward cancellation while creditors negotiated over the reorganized equity.

Management said in the petition-day release that the cases covered Nine and certain U.S. and Canadian subsidiaries, while operations outside the United States and Canada were left out of chapter 11. That kept the filing focused on the capital structure and lender negotiations.

Releases, NCS, and the Hearing Narrowed the Fight

The main litigated issues at confirmation were the third-party releases, the scope of the injunction, and whether the debtors had shown enough cause to waive the Rule 3020(e) stay. The U.S. Trustee objection argued that the releases remained nonconsensual under Purdue, that opt-out mechanics did not create affirmative consent, that governmental claims needed clearer carve-outs, and that the plan had not justified immediate effectiveness. By the March 4 hearing, debtors' counsel said the other objections had been resolved, leaving Judge Lopez to decide the release dispute.

The March 4 hearing transcript shows the court treating the release disclosures and opt-out language as sufficiently conspicuous and moving ahead with confirmation and the stay waiver over the remaining U.S. Trustee arguments. The next-day effective date shows the debtors obtained the timing they were seeking.

The NCS Multistage carve-out was more specific. The NCS stipulation granted stay relief to let the patent appeal and any remand proceedings continue, and preserved NCS's ability to pursue rights under a $775,000 bond and related letters of credit if it obtained a final, non-appealable judgment. The confirmation order then stated that NCS's rights and remedies were not discharged, enjoined, released, or terminated; that NCS was not a releasing party; and that it had no obligation to file a proof of claim.

Epiq reported about 209 third-party release opt-outs as of the opt-out deadline. That did not stop confirmation, but it left the release package as a live issue for the U.S. Trustee and the court.

Advisors and Post-Effective Cleanup

The Texas Lawbook reported that Nine brought in Kirkland & Ellis and Kane Russell Coleman Logan as lead legal counsel, with FTI Consulting, Moelis, and KPMG in supporting financial and tax roles. Kirkland separately publicized the engagement, and Law360's lawyer roundup captured the same professional lineup from the market side.

The filing record shows the same structure. Nine sought retention of Kirkland as lead restructuring counsel, Kane Russell as local and conflicts counsel, Moelis as investment banker and placement agent, FTI as financial advisor, and Epiq as claims and noticing agent. The Kirkland retention application disclosed a $500,000 retainer plus a larger special-purpose retainer, while the Epiq retention order approved the claims and noticing function at the start of the case. White Oak and the affiliated ABL lenders anchored the financing side, while the ad hoc noteholder group came into chapter 11 already aligned behind the plan.

The amended plan required final fee applications for pre-confirmation services within 45 days after the effective date, cure claims and assumption objections within 30 days after the effective date, and amendments to the assumed and rejected contract schedules within 45 days after effectiveness. Even a one-month prepack left post-effective work on professional fees, contract assumptions, and the litigation carve-outs.

Those deadlines mattered because the case ended quickly, but not entirely.

Timeline From Petition to Emergence

Nine filed after prepetition negotiations with the ABL group and noteholders had already produced an executable deal, and the court record shows the restructuring moving on a narrow sequence of financing, solicitation, confirmation, and effectiveness milestones. The February 1 filing, February 8 interim DIP coverage, March 4 confirmation coverage, and March 5 emergence announcement track the same compressed arc.

Emergence on March 5, rather than later in March, shows that the DIP milestones, the prepetition support package, and the confirmation record all lined up without a late break in creditor support.

Management had originally framed the bankruptcy as a process expected to finish in about 45 days. Emergence on March 5 meant the company beat that public timetable. That is the clearest measure of how little slippage the debtors saw between petition and effectiveness.

Frequently Asked Questions

When did Nine Energy Service file and emerge from chapter 11?

Nine filed chapter 11 on February 1, 2026, won confirmation on March 4, and emerged on March 5.

How much debt did Nine cut in the restructuring?

The company said it reduced secured debt by about 320 million, which matches outside confirmation coverage of the plan economics.

What happened to the senior secured notes and public equity?

The senior secured notes became the fulcrum security and received the reorganized equity under the plan, while the old common stock was canceled. NYSE Regulation said in its delisting notice that the listed shares would be wiped out in the restructuring.

Were unsecured creditors paid in full?

General unsecured claims were treated as unimpaired under the plan, while management had said in the petition-day release that vendors were expected to be paid in full in the ordinary course.

What financing supported the case?

The case ran on a $125 million DIP ABL with a full roll-up of the prepetition ABL claims, and it exited into a $135 million ABL facility. The company had already refinanced its prepetition revolver through the May 2025 White Oak ABL, which positioned the same lender group to bridge the bankruptcy.

Why did Nine Energy need chapter 11?

The first day record describes an overleveraged balance sheet, high interest expense, and industry headwinds that limited the company's flexibility. Public disclosures showed 2024 revenue of $554.1 million, March 2025 debt and cash, and a January 2026 downgrade to CCC- before the filing.

What was the main dispute at confirmation?

The remaining fight centered on third-party releases and the request to waive the Rule 3020(e) stay. The U.S. Trustee objected, but the debtors won confirmation and immediate effectiveness after the March 4 hearing.

Who owns Nine Energy after emergence?

Ownership shifted to the senior secured noteholders under the plan. The emergence announcement and the NYSE delisting notice both reflect that the old public equity did not survive the restructuring.

Who is the claims agent for Nine Energy Service?

Epiq Corporate Restructuring, LLC serves as the claims and noticing agent under the order approving its retention at the start of the case.

For more chapter 11 coverage, visit the ElevenFlo blog.