Energy Future wants more time to hammer out reorganization issues

The bankruptcy court for Texas power producer Energy Future Holdings plans a Feb. 10 hearing on the company’s Jan. 20 motion to extend the time for it to exclusively file a reorganization plan by about eight months.

Energy Future Holdings and its subsidiary companies in bankruptcy want to extend the periods during which they have the exclusive right to file a chapter 11 plan through Oct. 29, 2015, and extend the deadline to win creditor acceptances of that plan through Dec. 29, 2015. These cases are pending at the U.S. Bankruptcy Court for the District of Delaware.

Paul Keglevic, the Executive Vice President, Chief Financial Officer, and Co-Chief Restructuring Officer of Energy Future Holdings, said in Jan. 20 supporting testimony that: “I believe that maintaining the Exclusivity Periods is critical to the Debtors’ ability to advance plan discussions beyond the early stages. If granted an extension of the Exclusivity Periods, I anticipate that the Debtors’ priority will be to facilitate a continued dialogue with their various stakeholders in order to accomplish the Debtors’ ultimate goal—achieving as much consensus as possible on a plan of reorganization that maximizes value and allows the Debtors to expeditiously exit chapter 11. I believe such a discussion will be more difficult in an environment where multiple plans can be proposed and parties become less willing to engage in a global restructuring discussion.

“In addition, based on the progress of such restructuring discussions to date, I believe that an extension of the Exclusivity Periods will motivate the parties to work with the Debtors to develop plan alternatives, as well as provide the Debtors with additional time to thoughtfully evaluate such alternatives with an eye towards maximizing the value of each of the respective Debtor’s estates. I also believe an extension of the Exclusivity Periods will allow the Debtors to make further progress on the sale process regarding the economic interest in Oncor Electric Delivery Company LLC….” Oncor is a power delivery unit of Energy Future Holdings.

Their Jan. 20 extension request noted: “The size and complexity of these chapter 11 cases is self-evident. These chapter 11 cases involve nearly $49 billion in debt and 71 Debtor entities—with approximately 5,700 employees—that engage in complex operations in a number of industries regulated by various governmental entities. As has been reported, these chapter 11 cases represent one of the largest chapter 11 cases filed in the District of Delaware and the seventh largest case filed in history (by liabilities).”

They later added: “This is the Debtors’ second motion to extend the Exclusivity Periods. Because only nine months have elapsed in these chapter 11 cases, and because of the Debtors’ significant work on negotiating a plan of reorganization to date, the Debtors respectfully submit that this factor weighs in favor of an extension of the Exclusivity Periods.” 

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.