Energy Future Seeks to File Debt-Plan Details June 13Steven Church and Linda Sandler
Energy Future Holdings Corp., the bankrupt Texas power company, said it will file a detailed description next month of how it hopes to restructure $40 billion of debt in less than a year.
The filing, known as a disclosure statement, is what creditors use in deciding how to vote on a bankruptcy reorganization plan. The court must approve the disclosure before balloting can be held and will later take the results into consideration when deciding on the plan. The statement is due June 13.
Energy Future’s 11-month timetable has been opposed by lower-ranking creditors who say the company is trying to ram a plan through U.S. Bankruptcy Court in Wilmington, Delaware. Those creditors are trying to have the case moved closer to the power provider’s Dallas headquarters.
Energy Future filed for bankruptcy April 29, listing $49.7 billion in liabilities. The company is seeking approval of a plan that would hand control of its deregulated power-producing unit to senior lenders and give the unit that owns Texas’s biggest electricity transmission company to a different group of creditors. Some lower-ranking creditors oppose the proposal.
Energy Future included the date for the disclosure statement in a status report today to U.S. Bankruptcy Judge Christopher Sontchi in Wilmington. The company updated Sontchi on its effort to give creditors access to thousands of e-mails, documents and other material.
In the report, Energy Future accused lower-ranking creditors of demanding to see “virtually every document or piece of paper” the company has.
Energy Future investors KKR & Co., TPG Capital and Goldman Sachs Capital Partners, whose ownership will be cut to less than 1 percent under a proposed refinancing, asked a judge to limit a probe of their decisions on the plan. The three firms took the company private in a record $48 billion leveraged buyout.
The information request, made by a trustee on behalf of creditors who may lose money in the reorganization, is too broad because it seeks seven years worth of documents, the investors said.
While bankruptcy court rules sometimes seem to permit “‘fishing expeditions,’ what is proposed here is to scour the Pacific Ocean, in a matter of days, in search of any and all fish regardless of the size, shape or species,” the investors said in court papers filed yesterday.
Wilmington Savings Fund Society FSB, the trustee, has said moving the case to Texas would be more convenient for company managers, who would be closer to the courthouse. It is seeking documents to back up its claims that managers chose Delaware to push through their own plan without regard for many creditors.
The case is Energy Future Holdings Corp., 14-bk-10979, U.S. Bankruptcy Court, District of Delaware (Wilmington).