Energy Future Postpones Hearing on Restructuring Agreement

Posted by Eric Haun
Friday, June 06, 2014

A lawyer for Energy Future Holdings, the bankrupt Texas power company, told a judge on Friday the company will postpone for a second time a hearing to approve an agreement that is key to its ambitious timeline to exit bankruptcy in 11 months.

The restructuring support agreement, or RSA, allows the company, Texas's largest power provider, to pay professionals and helps to hold its creditors to a process for restructuring its $42 billion in debt.

While the RSA hearing set for June 30 was postponed, U.S. Bankruptcy Court Judge Christopher Sontchi in Wilmington, Delaware, also barred an effort by junior creditors to use the RSA hearing to make their case that the company could afford to pay them more.

Energy Future filed one of the largest U.S. bankruptcies in April after a year of negotiations with creditors.

The company took on much of the debt in 2007, when it was formed with the record buyout of TXU Corp, led by KKR & Co , TPG Capital Management and the private equity arm of Goldman Sachs. The deal turned out to be an ill-timed bet on natural gas prices, which soon began to plummet.

The RSA outlines the company's plan to spin off its TCEH business, which owns Luminant power plants and the utility TXU Energy, to the unit's senior creditors, which are owed $24.4 billion.

The plan is opposed by junior creditors, who are owed $7.7 billion by TCEH. Under the plan, they will have to share about $200 million, or less than 3 cents on the dollar. Sontchi rejected their effort to use the RSA hearing to try to prove TCEH is being undervalued and they can get paid more.

Edward Sassower, a lawyer from the firm of Kirkland & Ellis who is representing Energy Future, said the company would postpone the RSA hearing to July 18 from June 30 because it could not comply with a June 20 deadline set by Judge Sontchi for disclosures, known as schedules.

"The debtors do not have confidence that we can file the schedules without errors by June 20," said Sassower. He said the company would seek the consent of the creditors and lenders that had signed on to the RSA to move the hearing to July 18.

Last month, the company postponed the RSA hearing to June 30 from early June.

While senior creditors will gain ownership of TCEH, less than half support the RSA plan, and they have been bickering over how to divvy up what they get under the proposal.

A lawyer for the junior creditors compared the bankruptcy to the differing classes on a flight.

"People in the front of the plane are arguing over caviar or lobster and will it be apportioned by row number or seat number," Chris Shore, of White & Case, told Sontchi, while his clients in coach hope "to get chips at some point."

The RSA also anticipates that unsecured creditors of EFIH, the other big part of Energy Future's business that controls the Oncor power line business, will take control of that unit when it emerges from bankruptcy.

Later Friday, Sontchi will be asked to approve a $5.4 billion loan that will be used to refinance senior creditors of EFIH.

(Reporting by Tom Hals in Wilmington, Delaware; Editing by Jeffrey Benkoe)

Maritime Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter January 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Kemp Joins PMSA as Vice President

The Pacific Merchant Shipping Association (PMSA) announced the hire of Carl Kemp as a Vice President based in the organization’s Long Beach office.    Kemp brings

FSL Trust Divests Two Containerships

FSL Trust Management Pte. Ltd., as the trustee-manager of First Ship Lease Trus, announced that the Trust has completed the disposal of Ever Radiant and Ever Respect

Sill Reinforcements Complete in New Panama Canal Locks

The Panama Canal Authority (ACP) announced that sill reinforcements in the new locks have been completed this week, bringing the Panama Canal Expansion closer to inauguration.

Finance

FSL Trust Divests Two Containerships

FSL Trust Management Pte. Ltd., as the trustee-manager of First Ship Lease Trus, announced that the Trust has completed the disposal of Ever Radiant and Ever Respect

COSCO Also Eyes Greek Train Network

China's COSCO already the sole bidder for Greece's Piraeus Port. Buying both would give COSCO a European transhipment hub. China's COSCO is expected to make

Asia-Europe Box Rates Down 8 pct

Shipping freight rates for transporting containers from ports in Asia to Northern Europe fell by 8.1 percent to $431 per 20-foot container (TEU) in the week ended on Friday,

Energy

UAE Plans Floating LNG Import Terminal

State-owned Abu Dhabi National Oil Co. (ADNOC) plans to start a new liquefied natural gas floating import terminal (FSRU) in the second half of this year, three LNG industry sources said.

Glencore to Lift Iranian Fuel Oil at Bandar Mahshahr

Anglo-Swiss commodity trader Glencore has chartered a ship to load Iranian fuel oil at the Iranian port of Bandar Mahshahr in a move that signals the return of

Total, ENN Ink 10-year LNG Supply Pact

European oil major Total has agreed to supply 500,000 tonnes a year of liquefied natural gas (LNG) for 10 years to China's privately-run ENN Group, Total said on Thursday.

News

Kemp Joins PMSA as Vice President

The Pacific Merchant Shipping Association (PMSA) announced the hire of Carl Kemp as a Vice President based in the organization’s Long Beach office.    Kemp brings

Crowley Christens 2nd LNG-ready Product Tanker

Crowley christens second of four newly built, LNG-ready product tankers for use in U.S. coastwise trade   Crowley Maritime Corp. has christened the second of

VT Halter Delivers ATB Tug to Bouchard

VT Halter Marine, Inc. announced the delivery of the M/V Morton S. Bouchard Jr., the first of the two 6,000 horsepower Twin Screw Articulated Tug Barge (ATB) tugs to Bouchard Transportation Co.

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Naval Architecture Navigation Pipelines Pod Propulsion Port Authority Ship Repair Shipbuilding / Vessel Construction Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1094 sec (9 req/sec)