Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Energy Future Holdings Corp. closer to bankruptcy deal
Author: Joel R. Glucksman
Date: April 8, 2014
Key Contacts
Back
Energy Future Holdings Corp. is closing in on a deal that will allow it to speed up its planned bankruptcy restructuring, according to Bloomberg. Six years ago, the company was bought out in a historic $48 billion leveraged buyout, which left it with debt it couldn’t afford to pay. The company’s board of directors met recently after loan holders who walked away from October talks rejoined the discussion. The October discussions were intended to establish a blueprint for when the company files for protection under Chapter 11 of the bankruptcy law.
The company is lining up $9 billion in bankruptcy loans before its filing, sources involved told Reuters. The $9 billion debtor-In-possession loan is not yet signed, but is expected to be the largest privately funded bankruptcy filing ever to occur. The financing will include a $4 billion DIP loan for Texas Competitive Electric Holdings, the company’s unregulated merchant generation unit, and an almost $5 billion DIP loan for Energy Future Intermediate Holdings.
The October negotiations fell apart before Energy Future paid out $270 million in interest to junior bondholders – money that senior lenders had hoped would stay within the company, according to Bloomberg. The company’s private equity owners have been seeking a plan that would keep the company together. They acquired the company in 2007, using $40.1 billion of debt, in a bet that energy prices would increase. Instead, energy prices fell.
In the third quarter of 2013, Energy Future brought in $5 million, its first net income since 2010, according to the news source. Total assets were $38.7 billion as of Sept. 30, 2013, compared to $50.2 billion in total liabilities.
- Practices: Bankruptcy & Creditors' Rights, Corporate Transactions & Business, Bankruptcy Litigation
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
When to Settle and When to Fight: A Litigator's Framework
Every lawsuit comes with a cost, and knowing when to settle a lawsuit is one of the most consequential decisions a business owner will face. Experienced litigators understand how to minimize cost and obtain certainty for their clients. For many business owners, the decision is viewed almost entirely through a financial lens: What will it cost […]
Author: Sean M. Pena
A Whistleblower Just Filed a Complaint Against Your Company: Here's What to Do Now
Few situations create more uncertainty than learning that an employee has filed a whistleblower complaint. Questions arise immediately: Is the allegation legitimate? Should the employee be placed on leave? Do we need to notify our insurance carrier? Are we now prevented from disciplining the employee if there are unrelated ongoing work related issues? There is […]
Author: Sean M. Pena
Assignment for the Benefit of Creditors: An Alternative to Bankruptcy for Distressed Businesses
When a business reaches the point where it can no longer service its debts or otherwise resolve its liabilities, management is often faced with a difficult question: is a bankruptcy filing necessary or is there another way to perform an orderly liquidation or sale of the business assets? While Chapters 7 and 11 of the […]
Author: John D. Giampolo
Breaking Down New Jersey’s “Mansion” Tax: What Buyers and Sellers Need to Know
For many years, the New Jersey Mansion Tax has been a significant consideration in high-value real estate transactions. Recent legislative changes, however, have substantially altered how the tax operates, including who is responsible for paying it and the amount owed in certain transactions. Whether you are purchasing, selling, or investing in New Jersey real estate, […]
Author: George McGowan
Estate Planning for Digital Assets Under New Jersey Law
As our personal and financial lives increasingly move online, estate planning must evolve to address a new category of property: digital assets. From email accounts and social media profiles to cryptocurrency and cloud-stored business records, these assets often carry both financial and sentimental value. Yet, without proper planning, they can become inaccessible—or even lost—upon incapacity […]
Author: Marc J. Comer
The Role of Representation and Warranty Insurance in M&A Transactions
In today’s mergers and acquisitions market, representation and warranty (R&W) insurance has become a common feature of deal negotiations. Once used primarily in larger transactions, R&W insurance is now frequently incorporated into middle-market deals as buyers and sellers look for efficient ways to allocate risk and close deals. When structured properly, R&W insurance can help […]
Author: George McGowan
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.