Energy Future Holdings Corp. delayed indefinitely hearings where it planned to seek approval of a $1.9 billion loan and an agreement reached with some creditors before the Texas power provider filed for bankruptcy.
Energy Future needs time to “respond constructively” to remarks made by U.S. Bankruptcy Judge Christopher Sontchi at a hearing last week, the Dallas-based company said in a court filing yesterday in Wilmington, Delaware.
At hearings on June 30 and July 1, eight groups of Energy Future lenders asked Sontchi to slow the company’s trip through bankruptcy, accusing the power supplier of funneling benefits to favored investors.
The $1.9 billion loan, to be used to pay lenders holding high-interest-rate securities, is part of a reorganization plan devised by the company with investors such as Fidelity Investments. Dissenting creditors said a loan offered by a group including Morgan Stanley and NextEra Energy Inc. (NEE) was much cheaper, yet Energy Future rejected it.
Sontchi extended a hearing on the loan by 2 1/2 days to hear testimony and give creditors time to question Energy Future’s hired advisers, including Evercore Partners Inc. (EVR) The hearing was set to continue on July 10 and 11, followed by a July 18 hearing on the pre-bankruptcy pact with select lenders.
Energy Future said it was delaying all three hearings and will reset them at a time still to be decided. The company said it will report to Sontchi on July 18 on progress in talks with creditors and other parties on “potentially beneficial” developments.
The case is Energy Future Holdings Corp., 14-bk-10979, U.S. Bankruptcy Court, District of Delaware (Wilmington).
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