Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Energy Future Holdings Proposes Bankruptcy Plan
Author: Joel R. Glucksman
Date: May 2, 2013
Key Contacts
Back
Private energy giant Energy Future Holdings proposed a pre-packaged bankruptcy plan to its creditors in the event that it’s forced to seek bankruptcy law protection under Chapter 11 of the Bankruptcy Code.
Under the proposal to restructure roughly $32 billion in debt, the company’s largest creditors would forgive $25 billion in debt in exchange for equity in the parent company and $5 billion in cash or new debt. Private-equity sponsors said they would support the proposal if retained 15 percent of the company’s equity interest, leaving 85 percent for holders of the unit’s senior loans. However, those close to the situation said creditors have yet to agree to these terms.
“This means nothing until the creditors agree to it,” Joseph DeSapri, a credit analyst at Morningstar Inc., told Bloomberg in a telephone interview. “An 85 percent equity share in the company has to be sufficient for the forgiveness of debt and if it is not, the creditors won’t agree to it.”
While all parties involved are negotiating on the terms of a potential restructuring, the company has not yet officially filed for bankruptcy protection. The New York Times reports that it may take several months before Energy Future determines if filing is in its best interest.
The Texas-based company went private in 2007 in a $45 billion buyout led by KKR, TPG Capital and Goldman Sachs Group Inc. However, Bloomberg explains that the deal was a large gamble as the buyout saddled the company with $40 billion in debt and the company hoped that natural gas prices would rise, thereby giving its coal-fired plants an advantage. However, these prices fell in 2012, putting the company in a precarious financial position.
- 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
New Jersey’s Revised UHAC Regulations: What Residential Developers Need to Know About Affordable Housing Commitments
New Jersey residential developers with affordable housing obligations should carefully review their existing approvals, development agreements, and proposed deed restrictions in light of the State’s revised UHAC regulations (Uniform Housing Affordability Controls). The regulations, which took effect on November 6, 2025, significantly change the administration and physical requirements for affordable housing units. For developers with […]
Author: Wendy Rubinstein Quiroga
“No Comment” Culture: Why Silence Is Often the Riskiest Legal Strategy
A “no comment” response is sometimes the right call when a legal problem arises. As a blanket policy, however, it lets allegations go unanswered, deadlines pass, evidence disappear, and manageable disputes grow into expensive litigation. The businesses that fare best are usually the ones that say little publicly while acting decisively behind the scenes. When […]
Author: Sean M. Pena
Utility-Scale Battery Storage Projects: A Legal Roadmap for Developers, Property Owners and Other Stakeholders
Utility-scale battery energy storage systems (BESS) are becoming an increasingly important component of the electric grid throughout New Jersey, New York, and Pennsylvania. As renewable generation expands, electricity demand increases and grid operators seek greater flexibility, battery storage can help balance supply and demand while providing additional capacity and reliability. For developers, battery storage presents […]
Author: Nicholas Wall
Navigating Disputes: Hire a Partnership Dispute Lawyer
A falling out between partners can be disastrous for any business. In many cases, the partnership will not survive. If you are in an unworkable situation with your partners, it may be time to consult a partnership dispute lawyer experienced in handling partnership breakups and dissolutions before the situation deteriorates any further. It is easy […]
Author: Jay McDaniel
Section 363 Sales in Bankruptcy: What Businesses, Lenders, and Buyers Need to Know
When a company enters Chapter 11 bankruptcy, many assume the process will culminate in a lengthy reorganization plan. However, distressed businesses are increasingly being sold through a different mechanism — a sale under Section 363 of the United States Bankruptcy Code. A Section 363 sale allows a company, as a debtor-in-possession in bankruptcy, to sell […]
Author: John D. Giampolo
Zoning Laws Explained: What You Need to Know Before Buying Property
Before buying property, it is critical to determine whether local zoning laws may affect your plans. If you plan to redevelop the property, you will want to confirm that local zoning regulations permit development as intended. If acquiring property that is already developed, you must verify that the use is permitted in the underlying zoning […]
Author: Wendy Rubinstein Quiroga
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.