Bankruptcy News

We've summarized the latest docket activity and news for publicly traded companies currently operating under U.S. Bankruptcy Court protection.

Bankruptcy/Chapter 11 / Bonds

Energy Future Holdings Chapter 11 Petition Filed

Energy Future Holdings (EFH) and more than 60 affiliated Debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the District of Delaware, lead case number 14-10979. The Company, which operates a portfolio of competitive and regulated energy businesses in Texas, is represented by Daniel J. DeFranceschi of Richards, Layton & Finger. EFH announced that it has entered into an agreement with certain key financial stakeholders to "reduce its approximately $40 billion of debt, lower its annual cash interest costs, access significant additional capital and create a sustainable capital structure for the future." John Young, president and chief executive officer, comments, "With this restructuring plan, we now have a path to a sustainable capital structure that would put EFH and its family of companies in an even stronger position over the long term to deliver for all of our stakeholders, including our customers, our employees and our business partners. This restructuring is focused on our balance sheet, not our operations." Under the terms of the proposed restructuring agreement, upon emergence, transactions would be implemented to eliminate certain debt at EFH and certain of its subsidiaries. Texas Competitive Electric Holdings (TCEH) and its subsidiaries would separate from EFH without triggering any material tax liability and TCEH's first lien lenders would receive all of the equity in the reorganized TCEH and the cash proceeds from the issuance of new debt at the reorganized TCEH in exchange for eliminating approximately $23 billion of TCEH's funded debt. This capital would convert, along with all EFH and Energy Future Intermediate Holding Company (EFIH) unsecured notes, into equity in the reorganized EFH upon completion of the reorganization. In addition, certain EFIH unsecured noteholders will receive cash consideration as a part of the reorganization. EFH would continue to own EFIH; and EFIH would continue to retain its interest in Oncor, which is not included in this Chapter 11 filing. The Company states that this agreement has substantial support from TCEH's first lien lenders, EFIH's unsecured creditors, EFIH's first and second lien lenders, EFH's unsecured creditors and the three private equity holders of EFH. In conjunction with the filing, TCEH and EFIH have secured commitments for new capital totaling up to $4.475 billion and $7.3 billion, respectively, in debtor-in-possession financing. Young adds, "Our existing capital structure has become unsustainable. We expect that, with the support of our financial stakeholders, our restructuring can proceed expeditiously as we seek to strengthen our balance sheet and position the company for the future."

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