Seadrill Ltd (NYSE:SDRL) and other 85 affiliated debtors recently filed for Chapter 11 bankruptcy protection in Texas to reduce their debt which has escalated to over $10 billion. The company is looking for a quick ways through bankruptcy that will pave way for alternative finances to save the world’s leading offshore oil-drilling company. The extensive downturn in oil prices made Seadrill to file for the chapter on September 12, having over $8 billion in funded debt and $3 billion as a contingent debt.

The company has negotiated for more time to clear off its $5.7 billion in bank loans and has saved over $1 billion in the new financial plans to maintain its operations until the market situation improves. The new restructuring strategy came up two years ago after the shareholders had consecutive arguable talks to save the sinking company which is not showing any recovery in the near future.

According to Judge David Jones, Seadrill’s bankruptcy is not a surprise to anyone, most offshore oil-drilling service firms are currently competing in the continuous shrinking market, and many have already landed into deep bankruptcy. Judge Jones is now appealing for the federal bankruptcy regulators to consider appointing a committee to help the Seadrill shareholders oversee the company stock which has rapidly sunk up to 90% within the year.

The restructuring plan will allot about 2% of the shares to the shareholders, while leaving the founder and the key shareholder, John Fredriksen, with a major stake. Fredriksen and Centerbridge Partners have devoted to contribute $860 million out of the $1 billion new debt and equity to the company. The move leaves little chances for other bondholders to participate in the new money to get the extra equity in the company, which might bring court wrangles if not handled carefully.

The two major investors significantly influenced the coalition of banks to support the bankruptcy filing, which is an essential factor in the current company situation. However, the company is offering options to its unhappy creditors including the chance to over-quote the $1 billion new financing pledge from the key investors.