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
What Every Real Estate Investor Should Know Before Buying a Rental Property
Before buying a New Jersey rental property, an investor should verify realistic operating numbers, the property’s legal and regulatory status, lead-based paint and flood compliance, the existing leases and tenant protections, and the right ownership structure. A rental property is more than a piece of real estate; it is an operating business subject to legal, […]
Author: Donald M. Pepe
Can You Change an Irrevocable Trust in New Jersey?
In New Jersey, an irrevocable trust can sometimes be modified even though its name suggests otherwise, and one of the primary tools for doing so is a process called decanting. Whether decanting is available depends on the specific terms of the trust and the discretion given to the trustee. Key takeaways: New Jersey has no […]
Author: Marc J. Comer
How Intellectual Property Valuation Will Impact Business Transactions
Intellectual property valuation determines the monetary value of a business’s IP assets, and it drives outcomes in licensing deals, joint ventures, mergers and acquisitions, financing, and ownership disputes. The most valuable assets of a business are often the things that cannot be seen or touched: a proprietary process, a copyrighted work, brand recognition, or the […]
Author: Jay McDaniel
Data Center, Dark Fiber, and Lit Services Agreements in New Jersey: Key Terms and Legal Pitfalls
For New Jersey data center owners and operators, a service agreement may look routine when it is signed. The network is functioning, the vendor is meeting its installation schedule, and the parties have agreed on pricing and performance specifications. The provisions that seem most important at that stage are often the technical ones. That changes […]
Author: George McGowan
Fort Monmouth Redevelopment and the Transformation of Monmouth County Real Estate
The Fort Monmouth redevelopment has entered its execution phase, and it is repositioning the broader Monmouth County real estate market. When Netflix and the Fort Monmouth Economic Revitalization Authority closed on the 292-acre Mega Parcel in December 2025, the transaction did more than hand over a deed. It marked the moment Fort Monmouth stopped being […]
Author: Donald M. Pepe
Local Zoning and Land Use Rules Every New Jersey Rental Property Owner Should Understand
Owning a residential rental property in New Jersey involves more than finding tenants and collecting rent. Property owners must comply with a combination of state laws, municipal ordinances, building and housing codes, and zoning and land use regulations. These requirements can affect everything from the number of dwelling units permitted at a property to whether […]
Author: Donald M. Pepe
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.