Dynegy Inc., a Houston-based power producer, filed for Chapter 11 bankruptcy protection in Poughkeepsie, New York, as part of a plan to reorganize.
Dynegy will merge with its Dynegy Holdings unit, which is already in bankruptcy, under the plan, the Houston-based company said in a statement today. The board met yesterday at a special meeting to vote on the filing after U.S. Bankruptcy Judge Cecelia Morris said at a July 2 hearing that she would approve the unit’s so-called disclosure statement.
The unit’s plan will pay bondholders between 59 cents and 89 cents on the dollar, the power producer has said. Dynegy put the unit into bankruptcy last year.
Under the proposal approved by Morris, the holdings unit will merge with the parent company and creditors will own 99 percent of the combined entity. The plan is the result of a settlement with creditors following a court-ordered investigation into asset transfers.
Dynegy listed assets of more than $11 billion and liabilities of over $5 billion in today’s bankruptcy filing. Under the reorganization plan, the company’s assets will be held under the parent company.
The company’s subsidiaries that own and operate its coal-fired and gas-fired businesses weren’t included in the filing today because they were financed last year, Dynegy said. The company’s lawyers are the New York-based law firm White & Case LLP. Its financial advisers are Lazard Freres & Co.
The case is In re Dynegy Inc., 12-36728, U.S. Bankruptcy Court, Southern District of New York (Poughkeepsie).