Energy Future Panel Includes Plan Opponents’ TrusteeSteven Church
Some Energy Future Holdings Corp. suppliers, a federal pension insurer and bondholder trustees who oppose a deal to give part of the company to senior lenders were named to a panel representing lower-ranked creditors in the electricity provider’s $50 billion bankruptcy.
Law Debenture Trust Co. of New York, a trustee for $5.5 billion of notes, Bank of New York Mellon Trust Co., trustee for $891.4 million of debt, and Holt Cat, a trade creditor, were among the seven members named to the panel yesterday by the U.S. Trustee, the Justice Department’s bankruptcy watchdog. Pension Benefit Guaranty Corp. was also named to the committee.
More than 150 attorneys and financial professionals attended the selection meeting at a Wilmington, Delaware, hotel. They were there either representing the interests of specific creditors or hoping to be hired by the newly formed committee.
“This was definitely atypical, in terms of the number of creditors and professionals,” Chris Ward, co-chairman of the Polsinelli law firm in Wilmington. There were more professionals at the meeting than actual creditors, according to Ward, who said his firm is hoping to be hired by the committee as local counsel.
Energy Future filed for court protection April 29 after negotiating a restructuring deal with senior lenders that virtually wipes out the equity stakes of KKR & Co., TPG Capital and Goldman Sachs Group Inc., which took the company private in a record $48 billion leveraged buyout in 2007.
Second-lien noteholders owed about $1.6 billion have objected to the plan, contending Energy Future is worth enough to pay them more than the company has offered. Holders of lower-ranked debt issued by the company’s deregulated unit stand to recover less than $350 million of the $7.7 billion they are owed.
Wilmington Savings Fund Society, a trustee representing bondholders opposed to the deal, was also named to the committee. WSFS has asked the judge overseeing the case to have it transferred from Delaware to a court in Dallas only a few blocks away from Energy Future’s headquarters.
Moving the case would be more convenient for the company officials, WSFS argues. The company opposes the move.
Panels such as the one chosen yesterday are common in large corporate bankruptcies, and their professional fees are paid by the debtor company.
The remaining panel members are ADA Carbon Solutions, a creditor owed $10.5 million, and HCL America Inc., which is owed $8.1 million. At least 15 unsecured creditors had sought seats on the committee.
The case is Energy Future Holdings Corp., 14-10979, U.S. Bankruptcy Court, District of Delaware (Wilmington).