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
IP Infringement: What Steps Can You Take If You're Affected?
IP infringement occurs when someone uses your intellectual property without your permission or beyond the scope of the permission you granted. Common examples of IP infringement include copying a product’s patented features or using a trademarked logo in a way that is likely to confuse consumers about the source or affiliation of goods or services. […]
Author: Michael Mietlicki
Public Allegations, Unfinished Investigation: What New Jersey Businesses Should Do Next
When facing public allegations of wrongdoing, companies should not let the speed of the public conversation dictate the speed of an investigation. An investigation designed to confirm a preferred narrative rather than establish the facts can create serious problems later, particularly if litigation, regulatory scrutiny, or employment claims follow. Key Takeaways When public allegations surface […]
Author: Sean M. Pena
BESS Interconnection: Managing Grid, Cost, and Schedule Risk
For battery energy storage system (BESS) developers, securing equipment and site control is only part of the development equation. A project must also connect to the electric grid, and increasingly, BESS interconnection is one of the biggest sources of schedule, cost, and contractual risk. Key Takeaways This article is Part 3 of our Battery Storage […]
Author: Nicholas Wall
Navigating Director and Officer Liability in Times of Financial Distress
Director and officer liability increases sharply when a company is in financial distress. Decisions that would draw little attention in a healthy business can later be challenged by creditors, shareholders, bankruptcy trustees, and regulators as breaches of fiduciary duty, fraudulent transfers, or oversight failures. Understanding where that exposure comes from, and how to manage it, […]
Author: Michael Mietlicki
Before You Buy: Managing Real Estate and Permitting Risk for BESS Projects in New York and New Jersey
For developers pursuing battery energy storage system (BESS) projects, finding the right property is only the beginning. BESS site selection is as much a legal and transactional exercise as a real estate decision, with risk analysis central to the project’s ultimate success. Key Takeaways The core questions for BESS site selection in New York and […]
Author: Nicholas Wall
What Business Owners Get Wrong Before Meeting a Litigation Attorney
What should you expect when meeting a litigation attorney about a business dispute? You should expect to describe the dispute in your own words, hand over the most important documents, flag any deadlines or immediate threats, and leave with a clearer picture of the problem, what information is still needed, and the likely next steps. […]
Author: Michael Mietlicki
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.