Energy Future Reaches Settles with Creditors over Bankruptcy Plan

by San Antonio Attorney

Energy Future Holdings, Texas’ biggest power company, finally reached a settlement with its last group of creditors opposing the Chapter 11 Bankruptcy resolution.  This increases the possibility that the plan will push through as planned.

The company finally reached an agreement with the official creditors committee representing Energy Future Holdings, along with a junior bonds holder, according to the court filings last Monday.

The plan will involve the sale of Oncor power distribution business to Hunt Consolidated.  This power distribution business is the biggest power distributor in the Lone Star State.  The deal is reportedly valued at $19 billion.

The committee expressed their opposition towards the structure of the deal, should the deal fail to abide by regulatory hurdles.

The settlement caused the committee and bondholders to withdraw their opposition to the Energy Future and Hunt Deal.  They will be financially compensated with some of the interest accumulated during the Bankruptcy filing.

The company will make its finalization of the settlement to Judge Christopher Sontchi at a hearing in Delaware on Wednesday.

The settlement will take place as soon as everything is wrapped up in a weeks-long trial to confirm the plan.

The plan will also include the spin-off of Energy Future’s power generation and retail utility businesses to senior creditors.

Should Judge Sontchi approve the plan, the company’s financial status will remain in ‘bankruptcy’ until regulatory problems have been resolved.

Energy Future also requires the approval of three governing bodies: Public Utility Commission of Texas, the U.S.  Nuclear Regulatory Commission and the Internal Revenue Service.

Energy Future was created upon the $32 billion takeover of TXU by KKR, TPG Capital Management and Goldman Sachs Capital Partners last 2007.

The Dallas-based company entered bankruptcy primarily due to its $42 billion in debt and low prices.

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