Judge approves merger of bankrupt Dynegy Inc. and Dynegy Holdings

A federal bankruptcy judge in New York on July 10 signed an order allowing the merger of Dynegy Holdings LLC, which sought bankruptcy protection last November, and parent Dynegy Inc. (NYSE: DYN), which sought bankruptcy on July 6 as part of a planned reorganization of finances keyed on its merger with Dynegy Holdings.

The order was signed by Judge Cecelia Morris at the U.S. Bankruptcy Court for the Southern District of New York. The order said that Dynegy Inc. and Dynegy Holdings are authorized, but not directed, to close the merger on or prior to the effective date of the reorganization plan, subject to conditions. The conditions include that a merger will not occur prior to the effective date unless and until the timing of the merger is subsequently approved by the Independent Manager and written consent is provided by Dynegy Inc., the Creditors’ Committee, the Lease Trustee and the Majority Consenting Senior Noteholders.

Also on July 10, in the Dynegy Inc. case, the judge established deadlines and procedures for creditors to file certain proofs of claim. Aug. 1 was established as the deadline for each person or entity (including, without limitation, each individual, partnership, joint venture, corporation, estate, and trust, and excluding governmental units) to file proofs of claim based on prepetition claims against Dynegy Inc. Also, Jan. 2, 2013, was established as the deadline for governmental units to file proofs of claim against Dynegy Inc.

Dynegy Inc. has said its subsidiaries that own and operate the company’s coal fleet (in Illinois) and gas-fired businesses were separately financed during 2011 and are therefore not included in the Chapter 11 filing. They will continue to operate as normal.

On Nov. 7, 2011, Dynegy Holdings and four affiliated companies that control the Danskammer and Roseton power plants in New York state filed petitions seeking relief under Chapter 11.

Dynegy Inc.’s subsidiaries produce and sell electric energy, capacity and ancillary services in key U.S. markets. The Dynegy Power LLC power generation portfolio consists of approximately 6,771 MW of primarily natural gas-fired intermediate and peaking facilities. The Dynegy Midwest Generation LLC portfolio consists of approximately 3,132 MW of primarily coal-fired baseload plants. The DNE portfolio, which is the one in bankruptcy, consists of about 1,693 MW from two power plants which are primarily natural gas-fired peaking (Roseton) and baseload coal generation (Danskammer) facilities.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.