KE 39434634 

Edward O. Sassower, P.C. (pro hac vice admission pending) Michael A. Condyles (VA 27807) 

Joshua A. Sussberg, P.C. Peter J. Barrett (VA 46179) 

Brian E. Schartz (pro hac vice admission pending) Jeremy S. Williams (VA 77469) 

KIRKLAND & ELLIS LLP KUTAK ROCK LLP 

KIRKLAND & ELLIS INTERNATIONAL LLP Bank of America Center 

601 Lexington Avenue 1111 East Main Street, Suite 800 

New York, New York 10022 Richmond, Virginia 23219 

Telephone: (212) 446-4800 Telephone: (804) 644-1700 

Facsimile: (212) 446-4900 Facsimile: (804) 783-6192 

 

- and - 

James H.M. Sprayregen, P.C. 

Justin R. Bernbrock (pro hac vice admission pending) 

Benjamin M. Rhode (pro hac vice admission pending) 

KIRKLAND & ELLIS LLP 

KIRKLAND & ELLIS INTERNATIONAL LLP 

300 North LaSalle 

Chicago, Illinois 60654 

Telephone: (312) 862-2000 

Facsimile: (312) 862-2200 

Proposed Co-Counsel to the Debtors 

IN THE UNITED STATES BANKRUPTCY COURT 

FOR THE EASTERN DISTRICT OF VIRGINIA 

RICHMOND DIVISION 

 ) 

In re: ) Chapter 11 

 ) 

PENN VIRGINIA CORPORATION, et al.,

1

 ) Case No. 16-32395 (___) 

 ) 

 Debtors. ) (Joint Administration Requested) 

 ) 

DEBTORS’ MOTION FOR ENTRY OF AN ORDER AUTHORIZING THE 

DEBTORS TO (I) CONTINUE INSURANCE COVERAGE ENTERED 

INTO PREPETITION AND SATISFY PREPETITION OBLIGATIONS 

RELATED THERETO, (II) RENEW, AMEND, SUPPLEMENT, EXTEND, OR 

PURCHASE INSURANCE POLICIES, AND (III) GRANTING RELATED RELIEF 

 

1

 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification 

number, include: Penn Virginia Corporation (4320); Penn Virginia Holding Corp. (7384); Penn Virginia MC 

Corporation (0458); Penn Virginia MC Energy L.L.C. (0462); Penn Virginia MC Operating Company L.L.C. 

(0466); Penn Virginia Oil & Gas Corporation (7929); Penn Virginia Oil & Gas GP LLC (3686); Penn Virginia 

Oil & Gas LP LLC (8109); Penn Virginia Oil & Gas, L.P. (9487). The location of the Debtors’ service address 

is: Four Radnor Corporate Center, Suite 200, 100 Matsonford Road, Radnor, Pennsylvania 19087. 

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Penn Virginia Corporation and its debtor affiliates, as debtors and debtors in possession 

in the above-captioned chapter 11 cases (collectively, the “Debtors”),2

 respectfully state the 

following in support of this motion: 

Relief Requested 

1. The Debtors seek entry of an order (the “Order”), substantially in the form 

attached hereto as Exhibit A, authorizing the Debtors to: (a) continue existing insurance 

coverage entered into prepetition and satisfy payment obligations related thereto in the ordinary 

course of business; (b) renew, amend, supplement, extend, or purchase insurance coverage in the 

ordinary course of business; and (c) granting related relief. The Debtors estimate that, as of the 

Petition Date, there are no outstanding premiums due on account of the Insurance Policies 

(as defined below). 

Jurisdiction and Venue 

2. The United States Bankruptcy Court for the Eastern District of Virginia 

(the “Court”) has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334. This 

matter is a core proceeding within the meaning of 28 U.S.C. § 157(b)(2). 

3. Venue is proper pursuant to 28 U.S.C. §§ 1408 and 1409. 

4. The bases for the relief requested herein are sections 105(a) and 363(b) of the 

Bankruptcy Code, Rules 6003 and 6004 of the Federal Rules of Bankruptcy Procedure 

(the “Bankruptcy Rules”), and Rule 9013-1 of the Local Rules of the United States Bankruptcy 

Court for the Eastern District of Virginia (the “Local Bankruptcy Rules”). 

 

2

 A detailed description of the Debtors and their businesses, and the facts and circumstances supporting this 

motion and the Debtors’ chapter 11 cases, are set forth in greater detail in the Declaration of R. Seth Bullock, 

Chief Restructuring Officer of Penn Virginia Corporation, in Support of Chapter 11 Petitions and First Day 

Motions (the “First Day Declaration”), filed contemporaneously with the Debtors’ voluntary petitions for relief 

filed under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”), on May 12, 2016 

(the “Petition Date”). 

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The Insurance Policies and Related Payment Obligations 

5. In the ordinary course of business, the Debtors maintain approximately 

12 insurance policies that are administered by various third-party insurance carriers (collectively, 

the “Insurance Carriers”). These policies provide coverage for, among other things, the Debtors’ 

property, general liability, automobile liability, workers’ compensation, umbrella coverage, 

excess liability, control of well, foreign voluntary compensation and employers liability, and 

directors and officers liability (collectively, the “Insurance Policies”). The aggregate annual 

premium for the Insurance Policies is approximately $1.1 million,3 plus applicable taxes and 

surcharges. A schedule of the Insurance Policies is attached hereto as Exhibit B.

4

6. The Debtors’ ordinary practice is to prepay the entire yearly premium for each of 

the Insurance Policies on or around the start date of each policy period.5

 The Insurance Policies 

renew throughout the year, predominantly in November for directors and officers related 

coverage and February for all other policies. The Debtors estimate that, as of the Petition Date, 

there are no outstanding premiums due on account of the Insurance Policies. Nevertheless, out 

of an abundance of caution, the Debtors seek authority to continue honoring any amounts on 

 

3

 The annual premiums paid by the Debtor’s include commission payments to the Debtors’ insurance broker. 

4

 The descriptions of the Insurance Policies set forth in this Motion constitute a summary only. The actual terms 

of the Insurance Policies and related agreements will govern in the event of any inconsistency with the 

description in this Motion. The Debtors request authority to honor obligations and renew all insurance policies, 

as applicable, regardless of whether the Debtors inadvertently fail to include a particular insurance policy on 

Exhibit B. Moreover, and in addition to the Insurance Policies listed on Exhibit B, the Debtors maintain 

numerous insurance policies with respect to, among other things, workers’ compensation, employee health, 

dental, disability, and life insurance benefits. These programs are described, and relief is requested with respect 

to such programs in the Debtors’ Motion for Entry of Interim and Final Orders (I) Authorizing the Debtors to 

(A) Pay Prepetition Wages, Salaries, Other Compensation, and Reimbursable Expenses and (B) Continue 

Employee Benefits Programs, and (II) Granting Related Relief, filed contemporaneously herewith. 

5

 The Debtors’ make an initial deposit on account of their control of well policy on February 16 of each year. As 

the Debtors’ work down the deposit amount, the insurer may request additional quarterly payments thereafter to 

cover additional production activities. The Debtors believe that there are currently no outstanding amounts due 

on account of the control of well policy. 

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account of the Insurance Policies in the ordinary course of business to ensure uninterrupted 

coverage under the Insurance Policies. 

7. Certain of the Insurance Policies are subject to regular audits (the “Insurance 

Policy Audits”), which may result in an adjustment of the premiums owed on account thereof. 

Insurance Policy Audits for prepetition premium payments will not conclude until after the 

Petition Date. As a result, the aggregate amount of the Debtors’ obligations arising from the 

Insurance Policy Audits is not known at this time. Accordingly, the Debtors seek authority to 

honor any amounts owed on account of any Insurance Policy Audits in the ordinary course of 

business. 

8. Continuation of the Insurance Policies and entry into new insurance policies is 

essential to the preservation of the value of the Debtors’ businesses and operations. Moreover, in 

many instances, insurance coverage is required by the regulations, laws, and contracts that 

govern the Debtors’ commercial activities, including the Office of the United States Trustee’s 

(the “U.S. Trustee’s”) requirement that a debtor maintain adequate coverage given the 

circumstances of its chapter 11 case. Accordingly, the Debtors request authority to maintain 

their existing Insurance Policies, pay prepetition obligations related thereto, and enter into new 

insurance policies in the ordinary course of business. 

The Debtors’ Insurance Brokers 

9. The Debtors obtain the majority of their Insurance Policies through their 

insurance brokers, Willis of Pennsylvania Inc. and Willis of Texas Inc. (collectively, referred to 

as “Willis”). Willis assists the Debtors in obtaining comprehensive insurance coverage for their 

operations in a cost-effective manner, manages renewal data, markets the insurance program, 

provides all interactions with carriers including negotiating policy terms, provisions, and 

premiums, handles claims, and provides ongoing support throughout the applicable policy 

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periods. Willis collects commission payments for services rendered as part of the premiums paid 

on the Insurance Policies. As of the Petition Date, the Debtors do not believe that they owe any 

amounts to Willis on account of fees, commissions, or any other prepetition obligations. Out of 

an abundance of caution, however, the Debtors seek authority to honor any amounts owed to 

Willis to ensure uninterrupted coverage under their Insurance Policies. 

10. Willis is also broker of record with respect to the Debtors’ directors’ and officers’ 

insurance policies (the “D&O Policies”). In this capacity, Willis is authorized to negotiate 

changes with respect to, or cancel, the Debtors’ existing D&O Policies. Willis is further 

authorized to procure new D&O Policies for the Debtors and, before the Petition Date, Willis 

assisted the Debtors with procuring a new directors and officers’ runoff policy. The Debtors pay 

Willis a commission in connection with these services, payable as part of the premiums paid on 

the D&O Policies. As of the Petition Date, the Debtors do not believe that they owe any 

amounts to Willis on account of fees, commissions, or any other prepetition obligations. Out of 

an abundance of caution, however, the Debtors seek authority to honor any amounts owed to 

Willis to ensure uninterrupted coverage under their D&O Policies. 

Basis for Relief

I. Continuation of the Insurance Policies is Required by the Bankruptcy Code and 

U.S. Trustee Operating Guidelines. 

11. Section 1112(b)(4)(C) of the Bankruptcy Code provides that “failure to maintain 

appropriate insurance that poses a risk to the estate or to the public” is “cause” for mandatory 

conversion or dismissal of a chapter 11 case. 11 U.S.C. § 1112(b)(4)(C). In addition, in many 

instances, the coverage provided under the Insurance Policies is required by the regulations, 

laws, and contracts that govern the Debtors’ commercial activities, including the operating 

guidelines issued by the Office of the United States Trustee for the Eastern District of Virginia 

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KE 39434634 

(the “U.S. Trustee Operating Guidelines”). Given this backdrop, the Debtors believe it is 

essential to their estates, and consistent with the Bankruptcy Code and the U.S. Trustee 

Operating Guidelines, that they maintain and continue to make all payments required under their 

Insurance Policies, and have the authority to supplement, amend, extend, renew, or replace their 

Insurance Policies as needed, in their judgment, without further order of the Court. 

II. Paying Obligations Under the Insurance Policies in the Ordinary Course of Business 

Is Warranted. 

12. Section 363 of the Bankruptcy Code provides, in relevant part, that “[t]he 

[debtor], after notice and a hearing, may use, sell, or lease, other than in the ordinary course of 

business, property of the estate.” 11 U.S.C. § 363(b)(1). Under section 363(b), courts require 

only that the debtor “show that a sound business purpose” justifies the proposed use of property. 

In re Montgomery Ward Holding Corp., 242 B.R. 147, 153 (D. Del. 1999); see also Comm. of 

Equity Sec. Holders v. Lionel Corp. (In re Lionel Corp.), 722 F.2d 1063, 1070–71 (2d Cir. 1983) 

(requiring a “good business reason” to approve a sale pursuant to section 363(b)); In re W.A. 

Mallory Co., 214 B.R. 834, 836 (Bankr. E.D. Va. 1997) (“This Court follows the ‘sound business 

purpose’ test when examining § 363(b) sales.”) (citing In re WBQ P’ship, 189 B.R. 97, 102 

(Bankr. E.D. Va. 1995)). Moreover, “[w]here the debtor articulates a reasonable basis for its 

business decisions (as distinct from a decision made arbitrarily or capriciously), courts will 

generally not entertain objections to the debtor’s conduct.” In re Johns-Manville Corp., 60 B.R. 

612, 616 (Bankr. S.D.N.Y. 1986); see also In re Tower Air, Inc., 416 F.3d 229, 238 (3d Cir. 

2005) (“Overcoming the presumptions of the business judgment rule on the merits is a 

near-Herculean task.”). Thus, if a transaction satisfies the business judgment rule, it should be 

approved under section 363(b) of the Bankruptcy Code. 

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13. Furthermore, section 105(a) of the Bankruptcy Code codifies the Court’s inherent 

equitable powers to “issue any order, process, or judgment that is necessary or appropriate to 

carry out the provisions of this title.” 11 U.S.C. § 105(a). This “doctrine of necessity” functions 

in a chapter 11 case as a mechanism by which the bankruptcy court can exercise its equitable 

power to allow payment of critical prepetition claims not explicitly authorized by the Bankruptcy 

Code and further supports the relief requested herein. See In re United Am., Inc., 327 B.R. 776, 

781 (Bankr. E.D. Va. 2005) (acknowledging the doctrine of necessity is “a necessary deviation 

because otherwise there will be no reorganization and no creditor will have an opportunity to 

recoup any part of its pre-petition claim”); In re NVR L.P., 147 B.R. 126, 127 (Bankr. E.D. Va. 

1992) (“Under [section 105(a)] the court can permit pre-plan payment of a pre-petition 

obligation when essential to the continued operation of the debtor”); see also In re Lehigh & New 

Eng. Ry., 657 F.2d 570, 581 (3d Cir. 1981) (holding that a court may authorize payment of 

prepetition claims if such payment is essential to debtor’s continued operation); In re Just for 

Feet, Inc., 242 B.R. 821, 824–25 (D. Del. 1999) (holding that section 105(a) of the Bankruptcy 

Code “provides a statutory basis for payment of pre-petition claims” under the doctrine of 

necessity); In re Ionosphere Clubs, Inc., 98 B.R. 174, 177 (Bankr. S.D.N.Y. 1983) (finding that 

section 105 empowers bankruptcy courts to authorize payment of prepetition debt when such 

payment is needed to facilitate the rehabilitation of the debtor). 

14. Here, the Debtors seek to continue, amend, supplement, and extend their existing 

Insurance Policies, and purchase new policies, as is required by applicable law, in the ordinary 

course of business. Paying obligations related to the Insurance Policies is warranted under 

section 363(b) and the doctrine of necessity. As noted above, continuation of the Insurance 

Policies is essential to continuing uninterrupted operations and preserving the value of the 

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Debtors’ estates and, in some cases, required by the regulations, laws, and contracts that govern 

the Debtors’ commercial activities, including the U.S. Trustee’s requirement that a debtor 

maintain adequate coverage given the circumstances of its chapter 11 case. Failure to maintain 

the Insurance Policies could result in the shutdown of certain drilling operations, which would 

have a detrimental impact on the Debtors’ businesses, or mandatory conversion or dismissal of 

the Debtors’ chapter 11 cases. 

15. Numerous courts in this jurisdiction have granted relief similar to that requested 

herein in other large chapter 11 cases. See, e.g., In re Alpha Natural Res., Inc., No. 15-33896 

(KRH) (Bankr. E.D. Va. Aug. 5, 2015); In re Patriot Coal Corp., No. 15-32450 (KLP) (Bankr. 

E.D. Va. June 4, 2015); In re James River Coal Co., No. 14-31848 (KRH) (Bankr. E.D. Va. Apr. 

10, 2014); In re Workflow Mgmt., Inc., No. 10-74617 (SCS) (Bankr. E.D. Va. Oct. 8, 2010); In 

re Greenbrier Hotel Corp., No. 09-31703 (KRH) (Bankr. E.D. Va. Mar. 20, 2009); In re S & K 

Famous Brands, Inc., No. 09-30805 (KRH) (Bankr. E.D. Va. Feb. 10, 2009).6

Processing of Checks and Electronic Fund Transfers Should be Authorized 

16. The Debtors have sufficient funds to pay the amounts described in this motion in 

the ordinary course of business by virtue of expected cash flows from ongoing business 

operations, debtor-in-possession financing, and anticipated access to cash collateral. In addition, 

under the Debtors’ existing cash management system, the Debtors can readily identify checks or 

wire transfer requests as relating to an authorized payment in respect of the Insurance Policies, as 

applicable. Accordingly, the Debtors believe that checks or wire transfer requests, other than 

those relating to authorized payments, will not be honored inadvertently. Therefore, the Debtors 

respectfully request that the Court authorize all applicable financial institutions, when requested 

 

6 Because of the voluminous nature of the orders cited herein, such orders have not been attached to this motion. 

Copies of these orders are available upon request of the Debtors’ proposed counsel. 

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by the Debtors, to receive, process, honor, and pay any and all checks or wire transfer requests in 

respect of the relief requested in this motion. 

The Requirements of Bankruptcy Rule 6003 Are Satisfied 

17. Bankruptcy Rule 6003 empowers a court to grant relief within the first 21 days 

after the Petition Date “to the extent that relief is necessary to avoid immediate and irreparable 

harm.” For the reasons discussed above, authorizing the Debtors to continue existing insurance 

coverage entered into prepetition, satisfy payment obligations related thereto, and renew, amend, 

supplement, extend, or purchase insurance coverage in the ordinary course of business and 

granting the other relief requested herein is integral to the Debtors’ ability to transition their 

operations into these chapter 11 cases. Failure to receive such authorization and other relief 

during the first 21 days of these chapter 11 cases would severely disrupt the Debtors’ operations 

at this critical juncture. For the reasons discussed herein, the relief requested is necessary in 

order for the Debtors to operate their businesses in the ordinary course and preserve the ongoing 

value of the Debtors’ operations and maximize the value of their estates for the benefit of all 

stakeholders. Accordingly, the Debtors submit that they have satisfied the “immediate and 

irreparable harm” standard of Bankruptcy Rule 6003 to support granting the relief requested 

herein. 

Reservation of Rights 

18. Nothing contained in this motion or any actions taken by the Debtors pursuant to 

relief granted in the Order is intended or should be construed as: (a) an admission as to the 

validity of any particular claim against a Debtor entity; (b) a waiver of the Debtors’ rights to 

dispute any particular claim on any grounds; (c) a promise or requirement to pay any particular 

claim; (d) an implication or admission that any particular claim is of a type specified or defined 

in this motion; (e) a request or authorization to assume any agreement, contract, or lease pursuant 

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KE 39434634 

to section 365 of the Bankruptcy Code; (f) a waiver or limitation of the Debtors’ rights under the 

Bankruptcy Code or any other applicable law; or (g) a concession by the Debtors that any liens 

(contractual, common law, statutory, or otherwise) satisfied pursuant to this motion are valid, 

and the Debtors expressly reserve their rights to contest the extent, validity, or perfection or seek 

avoidance of all such liens. If the Court grants the relief sought herein, any payment made 

pursuant to the Court’s order is not intended and should not be construed as an admission as to 

the validity of any particular claim or a waiver of the Debtors’ rights to subsequently dispute 

such claim. 

Waiver of Bankruptcy Rule 6004(a) and 6004(h) 

19. To successfully implement the foregoing, the Debtors request that the Court enter 

an order providing that notice of the relief requested herein satisfies Bankruptcy Rule 6004(a) 

and that the Debtors have established cause to exclude such relief from the 14-day stay period 

under Bankruptcy Rule 6004(h). 

Waiver of Memorandum of Points and Authorities 

20. The Debtors respectfully request that this Court treat this Motion as a written 

memorandum of points and authorities or waive any requirement that this Motion be 

accompanied by a written memorandum of points and authorities as described in Local 

Bankruptcy Rule 9013-1(G). 

Notice 

21. The Debtors will provide notice of this motion to: (a) the Office of the United 

States Trustee for the Eastern District of Virginia; (b) the holders of the 50 largest unsecured 

claims against the Debtors (on a consolidated basis); (c) the administrative agent under the 

Debtors’ prepetition secured credit agreement; (d) the indenture trustee under the Debtors’ 

7.25% senior notes due 2019; (e) the indenture trustee under the Debtors’ 8.500% senior notes 

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KE 39434634 

due 2020; (f) counsel to certain holders of the 2019 and 2020 senior notes; (g) counsel to the 

agent under the Debtors’ debtor-in-possession credit facility; (h) co-counsel to the agent under 

the Debtors’ debtor-in-possession credit facility; (i) the United States Attorney’s Office for the 

Eastern District of Virginia and for the states in which the Debtors operate; (j) the Internal 

Revenue Service; (k) the Environmental Protection Agency and similar state environmental 

agencies for states in which the Debtors conduct business; (l) the office of the attorneys general 

for the states in which the Debtors operate; (m) the Securities and Exchange Commission; (n) the 

Insurance Carriers; (o) Willis; and (p) any party that has requested notice pursuant to Bankruptcy 

Rule 2002. The Debtors submit that, in light of the nature of the relief requested, no other or 

further notice need be given. 

No Prior Request 

22. No prior request for the relief sought in this motion has been made to this or any 

other court. 

[Remainder of page intentionally left blank] 

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KE 39434634 

WHEREFORE, the Debtors respectfully request that the Court grant the relief requested 

herein and such other relief as the Court deems appropriate under the circumstances. 

Dated: May 12, 2016 

Richmond, Virginia 

 

/s/ Michael A. Condyles

Michael A. Condyles (VA 27807) Edward O. Sassower, P.C. (pro hac vice admission pending)

Peter J. Barrett (VA 46179) Joshua A. Sussberg, P.C. 

Jeremy S. Williams (VA 77469) Brian E. Schartz (pro hac vice admission pending) 

KUTAK ROCK LLP KIRKLAND & ELLIS LLP

Bank of America Center KIRKLAND & ELLIS INTERNATIONAL LLP 

1111 East Main Street, Suite 800 601 Lexington Avenue

Richmond, Virginia 23219 New York, New York 10022 

Telephone: (804) 644-1700 Telephone: (212) 446-4800 

Facsimile: (804) 783-6192 Facsimile: (212) 446-4900 

Michael.Condyles@KutakRock.com edward.sassower@kirkland.com 

Peter.Barrett@KutakRock.com joshua.sussberg@kirkland.com 

Jeremy.Williams@KutakRock.com brian.schartz@kirkland.com 

 

 - and - 

 

 James H.M. Sprayregen, P.C. 

 Justin R. Bernbrock (pro hac vice admission pending) 

 Benjamin M. Rhode (pro hac vice admission pending) 

KIRKLAND & ELLIS LLP

KIRKLAND & ELLIS INTERNATIONAL LLP 

 300 North LaSalle

 Chicago, Illinois 60654 

 Telephone: (312) 862-2000 

 Facsimile: (312) 862-2200 

 james.sprayregen@kirkland.com 

 justin.bernbrock@kirkland.com 

 benjamin.rhode@kirkland.com 

Proposed Co-Counsel to the Debtors and Debtors in Possession 

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KE 39434634 

EXHIBIT A 

Proposed Order 

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Edward O. Sassower, P.C. (pro hac vice admission pending) Michael A. Condyles (VA 27807) 

Joshua A. Sussberg, P.C. Peter J. Barrett (VA 46179) 

Brian E. Schartz (pro hac vice admission pending) Jeremy S. Williams (VA 77469) 

KIRKLAND & ELLIS LLP KUTAK ROCK LLP 

KIRKLAND & ELLIS INTERNATIONAL LLP Bank of America Center 

601 Lexington Avenue 1111 East Main Street, Suite 800 

New York, New York 10022 Richmond, Virginia 23219 

Telephone: (212) 446-4800 Telephone: (804) 644-1700 

Facsimile: (212) 446-4900 Facsimile: (804) 783-6192 

 

- and - 

James H.M. Sprayregen, P.C. 

Justin R. Bernbrock (pro hac vice admission pending) 

Benjamin M. Rhode (pro hac vice admission pending) 

KIRKLAND & ELLIS LLP 

KIRKLAND & ELLIS INTERNATIONAL LLP 

300 North LaSalle 

Chicago, Illinois 60654 

Telephone: (312) 862-2000 

Facsimile: (312) 862-2200 

Proposed Co-Counsel to the Debtors 

IN THE UNITED STATES BANKRUPTCY COURT 

FOR THE EASTERN DISTRICT OF VIRGINIA 

RICHMOND DIVISION 

 ) 

In re: ) Chapter 11 

 ) 

PENN VIRGINIA CORPORATION, et al.,

1

 ) Case No. 16-32395 (___) 

 ) 

 Debtors. ) (Joint Administration Requested) 

 ) 

ORDER AUTHORIZING THE DEBTORS TO (I) CONTINUE 

INSURANCE COVERAGE ENTERED INTO PREPETITION 

AND SATISFY PREPETITION OBLIGATIONS RELATED THERETO, 

(II) RENEW, AMEND, SUPPLEMENT, EXTEND, OR PURCHASE 

INSURANCE POLICIES, AND (III) GRANTING RELATED RELIEF 

Upon the motion (the “Motion”)2 of the above-captioned debtors and debtors in 

possession (collectively, the “Debtors”) for entry of an order (this “Order”), authorizing the 

 

1

 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification 

number, include: Penn Virginia Corporation (4320); Penn Virginia Holding Corp. (7384); Penn Virginia MC 

Corporation (0458); Penn Virginia MC Energy L.L.C. (0462); Penn Virginia MC Operating Company L.L.C. 

(0466); Penn Virginia Oil & Gas Corporation (7929); Penn Virginia Oil & Gas GP LLC (3686); Penn Virginia 

Oil & Gas LP LLC (8109); Penn Virginia Oil & Gas, L.P. (9487). The location of the Debtors’ service address 

is: Four Radnor Corporate Center, Suite 200, 100 Matsonford Road, Radnor, Pennsylvania 19087. 

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Debtors to: (a) continue existing insurance coverage entered into prepetition and satisfy payment 

obligations related thereto; (b) renew, amend, supplement, extend, or purchase insurance 

coverage in the ordinary course of business; and (c) granting related relief, all as more fully set 

forth in the Motion; and upon the First Day Declaration; and this Court having jurisdiction over 

this matter pursuant to 28 U.S.C. §§ 157 and 1334; and this Court having found that this is a core 

proceeding pursuant to 28 U.S.C. § 157(b)(2); and that this Court may enter a final order 

consistent with Article III of the United States Constitution; and it appearing that venue of this 

proceeding and the Motion in this district is proper pursuant to 28 U.S.C. §§ 1408 and 1409; and 

this Court having found that the Debtors’ notice of the Motion and opportunity for a hearing on 

the Motion were appropriate under the circumstances and no other notice need be provided; and 

this Court having reviewed the Motion and having heard the statements in support of the relief 

requested therein at a hearing (the “Hearing”) before this Court; and this Court having 

determined that the legal and factual bases set forth in the Motion and at the Hearing establish 

just cause for the relief granted herein; and upon all of the proceedings had before this Court; and 

after due deliberation and sufficient cause appearing therefor, it is HEREBY ORDERED THAT: 

1. The Motion is granted as set forth herein. 

2. The Debtors are authorized to continue the Insurance Policies identified on 

Exhibit B to the Motion and, in their sole discretion, pay any prepetition or postpetition 

obligations related to the Insurance Policies, including any amounts owed to Willis. 

3. The Debtors are authorized, but not directed, to renew, amend, supplement, 

extend, or purchase insurance policies to the extent that the Debtors determine, in consultation 

 2 Capitalized terms used but not otherwise defined herein have the meanings ascribed to them in the Motion. 

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with counsel to the Ad Hoc Committee of Noteholders, that such action is in the best interest of 

their estates.

4. The Debtors are authorized, but not directed, to honor any amounts owed on 

account of any Insurance Policy Audits in the ordinary course of business.

5. Notwithstanding the relief granted in this Order and any actions taken pursuant to 

such relief, nothing in this Order shall be deemed: (a) an admission as to the validity of any 

prepetition claim against a Debtor entity; (b) a waiver of the Debtors’ right to dispute any 

prepetition claim on any grounds; (c) a promise or requirement to pay any prepetition claim; 

(d) an implication or admission that any particular claim is of a type specified or defined in this 

Order or the Motion; (e) a request or authorization to assume any prepetition agreement, 

contract, or lease pursuant to section 365 of the Bankruptcy Code; (f) a waiver or limitation of 

the Debtors’ rights under the Bankruptcy Code or any other applicable law; or (g) a concession 

by the Debtors that any liens (contractual, common law, statutory, or otherwise) satisfied 

pursuant to the Motion are valid, and the Debtors expressly reserve their rights to contest the 

extent, validity, or perfection or seek avoidance of all such liens. 

6. The banks and financial institutions on which checks were drawn or electronic 

payment requests made in payment of the prepetition obligations approved herein are authorized 

to receive, process, honor, and pay all such checks and electronic payment requests when 

presented for payment, and all such banks and financial institutions are authorized to rely on the 

Debtors’ designation of any particular check or electronic payment request as approved by this 

Order. 

7. The Debtors are authorized to issue postpetition checks, or to effect postpetition 

fund transfer requests, in replacement of any checks or fund transfer requests that are dishonored 

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KE 39434634 

as a consequence of these chapter 11 cases with respect to prepetition amounts owed in 

connection with any Insurance Policies. 

8. Notwithstanding anything to the contrary set forth herein, (a) any payment to be 

made, or authorization contained, hereunder shall be subject to the requirements imposed on the 

Debtors under the Debtors’ postpetition financing agreements (the “DIP Documents”) and any 

orders approving the DIP Documents and governing the Debtors’ use of cash collateral 

(including with respect to any budgets governing or relating thereto) and (b) to the extent there is 

any inconsistency between the terms of such orders approving the DIP Documents or the 

Debtors’ use of cash collateral and any action taken or proposed to be taken hereunder, the terms 

of such orders approving the DIP Documents and use of cash collateral shall control. 

9. The contents of the Motion satisfy the requirements of Bankruptcy Rule 6003(b). 

10. The requirement under Local Bankruptcy Rule 9013-1(G) to file a memorandum 

of law in connection with the Motion is waived. 

11. Notice of the Motion as provided therein is good and sufficient notice of such 

Motion and the requirements of Bankruptcy Rule 6004(a) and the Local Bankruptcy Rules are 

satisfied by such notice. 

12. Notwithstanding Bankruptcy Rule 6004(h), the terms and conditions of this Order 

are immediately effective and enforceable upon its entry. 

13. The Debtors are authorized to take all actions necessary to effectuate the relief 

granted in this Order in accordance with the Motion. 

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14. This Court retains exclusive jurisdiction with respect to all matters arising from or 

related to the implementation, interpretation, and enforcement of this Order. 

Richmond, Virginia UNITED STATES BANKRUPTCY JUDGE 

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WE ASK FOR THIS: 

/s/ Michael A. Condyles 

Michael A. Condyles (VA 27807) 

Peter J. Barrett (VA 46179) 

Jeremy S. Williams (VA 77469) 

KUTAK ROCK LLP 

Bank of America Center 

1111 East Main Street, Suite 800 

Richmond, Virginia 23219 

Telephone: (804) 644-1700 

Facsimile: (804) 783-6192 

- and - 

Edward O. Sassower, P.C. (pro hac vice admission pending) 

Joshua A. Sussberg, P.C. 

Brian E. Schartz (pro hac vice admission pending) 

KIRKLAND & ELLIS LLP 

KIRKLAND & ELLIS INTERNATIONAL LLP 

601 Lexington Avenue

New York, New York 10022 

Telephone: (212) 446-4800 

Facsimile: (212) 446-4900 

- and - 

James H.M. Sprayregen, P.C. 

Justin R. Bernbrock (pro hac vice admission pending) 

Benjamin M. Rhode (pro hac vice admission pending) 

KIRKLAND & ELLIS LLP 

KIRKLAND & ELLIS INTERNATIONAL LLP 

300 North LaSalle 

Chicago, Illinois 60654 

Telephone: (312) 862-2000 

Facsimile: (312) 862-2200 

Proposed Co-Counsel to the Debtors 

CERTIFICATION OF ENDORSEMENT 

UNDER LOCAL BANKRUPTCY RULE 9022-1(C) 

Pursuant to Local Bankruptcy Rule 9022-1(C), I hereby certify that the foregoing proposed order 

has been endorsed by or served upon all necessary parties. 

 /s/ Michael A. Condyles 

 

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EXHIBIT B 

Insurance Policies 

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Type of Policy Coverage Insurance Carriers Policy Number Policy Term Premium 

Commercial Automobile Travelers ZLP-41M50036-16-N4 02/16/2016- 02/16/2017 $54,134.00 

Commercial General Liability Travelers ZLP-41M50036-16-N4 02/16/2016- 02/16/2017 $178,054.00 

D&O Excess Liability XL Specialty Insurance 

Company 

ELU141958-15 11/30/2015 - 11/30/2016 $125,000.00 

D&O Fiduciary Liability & 

Crime 

Federal Insurance Company 8138-9477 11/30/2015 - 11/30/2016 $26,303.00 

D&O Side A National Union Fire Insurance 

Company of Pittsburgh, Pa. 

04-370-48-67 11/30/2015 - 11/30/2016 $68,250.00 

Directors/Officers Liability 

(Public Companies) 

Allied World National 

Assurance Company 

0309-3082 11/30/2015 - 11/30/2016 $67,000.00 

Employee Benefits Liability Travelers ZLP-41M50036-16-N4 02/16/2016- 02/16/2017 $423.00 

Energy, Exploration and 

Development; Operators Extra 

Expense; Care, Custody and 

Control 

100% Lloyd’s Syndicates NG00559A16 02/16/2016 - 02/16/2017 $125,560.00 

Primary D&O National Union Fire Insurance 

Company of Pittsburgh, Pa. 

04-370-48-56 11/30/2015 - 11/30/2016 $240,000.00 

Property 100% Lloyd’s Syndicates NG00550A16 02/16/2016 - 02/16/2017 $89,534.00 

Umbrella Excess Liability Travelers ZLP-41M50036-16-N4 02/16/2016- 02/16/2017 $99,746.00 

Workers Compensation and 

Employers Liability 

Travelers HN-UB-7G66261 02/16/2016 - 02/16/2017 $52,067.00 

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