Skip to main content

UPDATE 1-Bankruptcy of Texas power firm Energy Future to stay in Delaware

Texas's largest power company, Energy Future Holdings, overcame the first challenge to its huge class="mandelbrot_refrag">bankruptcy on Thursday when a Delaware judge ruled the Chapter 11 case should stay in his court rather than be transferred to Dallas, as some creditors wanted.

Judge Christopher Sontchi said Energy Future could have filed in several courts, and that it was clearly forum shopping, but he said that doing so was not "insidious".

"Given that it is a financial restructuring and given that the parties are in the Northeast, I think that favors Delaware," he said, accepting the company's main argument for filing in Wilmington.

 
 
 

The Dallas-based company has said it plans to restructure its $42 billion in debt, not its operations. It argued that most parties involved in the restructuring are class="mandelbrot_refrag">hedge funds and other sophisticated investors that are based in New York, a two-hour train ride from Wilmington.

Seeking the transfer was Delaware-based Wilmington Savings Fund Society (WSFS), trustee for second-lien notes issued by the Energy Future unit that owns the generating class="mandelbrot_refrag">business Luminant and TXU Retail.

"All the employees work and live in Texas, not in Delaware. All the assets are in Texas, none in Delaware. All the customers are in Texas, none in Delaware," Jeffrey Jonas, a partner in Brown Rudnick and an attorney for WSFS, told the court.

Sontchi rejected the focus on the location of employees and customers, noting that none of them objected to having the case in Wilmington.

Energy Future filed for class="mandelbrot_refrag">bankruptcy in April in Wilmington. The company was burdened by debt stemming from its record 2007 leveraged buyout of TXU Corp, led by KKR & Co, TPG and the private equity arm of Goldman Sachs.

Energy Future has subsidiaries incorporated in Delaware, which allows it to file in the state's busy U.S. Bankruptcy Court. The court has handled many big bankruptcies with no real connection to the state, such as that of the Los Angeles Dodgers baseball team.

Cases can be transferred if the transfer is seen to be in the interest of justice and fairness to the parties involved.

Only two cases with at least $1 billion in assets have been moved out of Wilmington in the past 30 years: Harrahs Jazz Co, in 1995, and Hawaiian Telecom Communications Inc, in 2008, according to Lynn LoPucki, a professor at UCLA Law School.

Earlier on Thursday, an attorney for Energy Future said the company will delay seeking court approval of a restructuring support agreement from June 6 to June 30 after creditors said they need more time to study the deal.

The plan involves splitting off the Luminant and TXU subsidiary, and turning those businesses over to senior creditors in return for forgiving some of the $24 billion the creditors are owed.

The plan also proposes that a separate Energy Future subsidiary that owns Oncor, a power transmission class="mandelbrot_refrag">business that is not bankrupt, would emerge from bankruptcy under the control of the subsidiary's junior unsecured creditors.

The case is In re Energy Future Holdings, U.S. Bankruptcy Court, District of Delaware, No. 14-10979 (Reporting by Tom Hals in Wilmington, Delaware; Editing by Jan Paschal and Peter Galloway)

Popular posts from this blog

Study Abroad USA, College of Charleston, Popular Courses, Alumni

Thinking for Study Abroad USA. School of Charleston, the wonderful grounds is situated in the actual middle of a verifiable city - Charleston. Get snatched up by the wonderful and customary engineering, beautiful pathways, or look at the advanced steel and glass building which houses the School of Business. The grounds additionally gives students simple admittance to a few major tech organizations like Amazon's CreateSpace, Google, TwitPic, and so on. The school offers students nearby as well as off-grounds convenience going from completely outfitted home lobbies to memorable homes. It is prepared to offer different types of assistance and facilities like clubs, associations, sporting exercises, support administrations, etc. To put it plainly, the school grounds is rising with energy and there will never be a dull second for students at the College of Charleston. Concentrate on Abroad USA is improving and remunerating for your future. The energetic grounds likewise houses various

Best MBA Online Colleges in the USA

“Opportunities never open, instead we create them for us”. Beginning with this amazing saying, let’s unbox today’s knowledge. Love Business and marketing? Want to make a high-paid career in business administration? Well, if yes, then mate, we have got you something amazing to do!   We all imagine an effortless future with a cozy house and a laptop. Well, well! You can make this happen. Today, with this guide, we will be exploring some of the top-notch online MBA universities and institutes in the USA. Let’s get started! Why learn Online MBA from the USA? Access to More Options This online era has given a second chance to children who want to reflect on their careers while managing their hectic schedules. In this, the internet has played a very crucial in rejuvenating schools, institutes, and colleges to give the best education to students across the globe. Graduating with Less Debt Regular classes from high reputed institutes often charge heavy tuition fees. However onl

Sickening moment maskless 'Karen' COUGHS in the face of grocery store customer, then claims she doesn't have to wear a mask because she 'isn't sick'

A woman was captured on camera following a customer through a supermarket as she coughs on her after claiming she does not need a mask because she is not sick.  Video of the incident, which has garnered hundreds of thousands of views on Twitter alone, allegedly took place in a Su per Saver in Lincoln, Nebraska according to Twitter user @davenewworld_2. In it, an unidentified woman was captured dramatically coughing as she smiles saying 'Excuse me! I'm coming through' in the direction of the customer recording her. Scroll down for video An unidentified woman was captured dramatically coughing as she smiles saying 'Excuse me! I'm coming through' in the direction of a woman recording her A woman was captured on camera following a customer as she coughs on her in a supermarket without a mask on claiming she does not need one because she is not sick @chaiteabugz #karen #covid #karens #karensgonewild #karensalert #masks we were just wearing a mask at the store. ¿ o