Nuverra Environmental Solutions, Inc. - 10-Q filing on 2016-11-07

Subsequent Events	9 Months Ended
Subsequent Events	Sep. 30, 2016
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events ABL Facility Amendments On October 13, 2016 (the “Eleventh Amendment Effective Date”), we entered into an Eleventh Amendment to Amended and Restated Credit Agreement (the “Eleventh Amendment”) by and among the Agent, the Lenders, and the Company. The Eleventh Amendment amended the ABL Facility on the Eleventh Amendment Effective Date by amending the refinancing covenant to extend the date by which we were required to refinance the ABL Facility in full from October 14, 2016 to November 4, 2016. The Eleventh Amendment also included certain other amendments to the ABL Facility (the “Post-Eleventh Amendment Effective Date Amendments”) that would become effective subsequent to the Eleventh Amendment Effective Date if, on or prior to November 4, 2016, the Agent received the proceeds of the Additional Term Loan Debt (as defined in the ABL Facility Amendment) in an amount not less than $10.0 million, which proceeds were to be used to pay down the ABL Facility. The Post-Eleventh Amendment Effective Date Amendments would further amend the ABL Facility by amending the refinancing covenant to extend the date by which we are required to refinance the ABL Facility in full from November 4, 2016 to November 30, 2016. Pursuant to the Eleventh Amendment, it would constitute an immediate event of default under the ABL Facility if, on or prior to November 4, 2016, we had not incurred the Additional Term Loan Debt and used the proceeds to pay down the ABL facility. On November 4, 2016 (the “Twelfth Amendment Effective Date”), we entered into a Twelfth Amendment to Amended and Restated Credit Agreement (the “Twelfth Amendment”) by and among the Agent, the Lenders, and the Company. The Twelfth Amendment amended the ABL Facility on the Twelfth Amendment Effective Date by amending the refinancing covenant to extend the date by which we were required to refinance the ABL Facility in full from November 4, 2016 to November 14, 2016. In addition, the Twelfth Amendment extended the date by which we are required to incur the Additional Term Loan Debt and use the proceeds thereof, in an amount not less than $10.0 million, to pay down the ABL Facility, from November 4, 2016 to November 14, 2016. Pursuant to the Twelfth Amendment, it would constitute an immediate event of default under the ABL Facility if, on or prior to November 14, 2016, we do not incur the Additional Term Loan Debt and apply the proceeds as described above. There can be no assurances that we will be able to refinance the ABL Facility by November 14, 2016, or that any such refinancing would be available to us on attractive or acceptable terms. In addition, there can be no assurances that we will be able to incur the Additional Term Loan Debt and use proceeds of not less than $10.0 million to pay down the ABL Facility by November 14, 2016. Any refinancing of the ABL Facility could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations. If we fail to comply with our refinancing covenant or are unable to obtain the Additional Term Loan Debt and apply the proceeds as described above, we would request a waiver from the Lenders or may be required to repay the outstanding balance of the ABL Facility. Failure to obtain a waiver or cure the default through repayment of the facility would create an event of cross default under our other credit facilities and indentures, including the Term Loan and the Indentures governing the 2018 Notes and 2021 Notes. There can be no assurance that the Lenders under the ABL Facility will grant a waiver of any default or that the lenders under the Term Loan will grant a waiver of, or that the holders of our 2018 Notes and 2021 Notes will consent to any waiver of, any cross default, and we currently do not have sufficient liquidity, including cash on hand, to repay the outstanding balance of the ABL Facility or our other indebtedness. In the event that we are unable to timely refinance the ABL Facility or incur the the Additional Term Loan Debt and apply the proceeds as described above, or obtain waivers thereof, or otherwise repay or refinance the ABL Facility when due, we may need to seek relief under the United States Bankruptcy Code. Deferral of Interest Payment On October 17, 2016, we elected to exercise our 30-day grace period and defer making the approximately $2.0 million in interest payments due October 17, 2016 on our outstanding $40.4 million principal amount of 2018 Notes. Under the 2018 Notes Indenture, we have a 30-day grace period following the October 17, 2016 interest payment date to make the interest payment before an event of default would occur. The occurrence of an event of default under the 2018 Notes Indenture would give the trustee or the holders of at least 25% aggregate principal amount of 2018 Notes the option to declare all of the 2018 Notes due and payable immediately. Additionally, the occurrence of such an event of default under the 2018 Notes Indenture that would also constitute an event of default under our (i) ABL Facility, (ii) Term Loan Agreement, or (iii) the 2021 Notes Indenture governing our 2021 Notes, would allow the respective administrative agents under the ABL Facility and Term Loan Agreement to declare the principal and accrued and unpaid interest under each agreement immediately due and payable and to exercise all other rights and remedies available to the respective agents and lenders, and allow the trustee or the holders of at least 25% aggregate principal amount of 2021 Notes under the 2021 Notes Indenture the option to declare all of the 2021 Notes due and payable immediately. We intend to use the grace period to engage in discussions with our debtholders regarding strategic alternatives to improve our long-term capital structure; however, there can be no assurances that any of these strategies will yield sufficient funds to meet our working capital or other liquidity needs, including for payments of interest and principal on our debt in the future, and any such alternative measures may be unsuccessful or may not permit us to meet scheduled debt service obligations, which could cause us to default on our debt obligations. In the event we cannot make the interest payment on our 2018 Notes, we may need to seek relief under the United States Bankruptcy Code.