UPDATE 2-Examiner sought for Dynegy bankruptcy

* Bond trustee calls bankruptcy "clearly unfair"

* Icahn, Seneca Capital are Dynegy shareholders

* Dynegy says reviewing court filings

By Jonathan Stempel

Nov 11 (Reuters) - A bond trustee requested on Friday the appointment of an examiner for the bankruptcy of Dynegy Inc's holding company, saying an investigation is needed to determine whether the proceedings are fair to bondholders.

US Bank NA made the request four days after Dynegy Holdings LLC sought Chapter 11 protection and two months after the holding company transferred assets related to coal-powered plants to its Houston-based parent, which did not file for bankruptcy.

It is a significant challenge to an unusual bankruptcy. Dynegy proposes to restructure several billion dollars of debt in a manner that would protect shareholders that include billionaire financier Carl Icahn and the Seneca Capital hedge fund, while causing losses for bondholders.

US Bank, a unit of US Bancorp , also on Friday sued on behalf of bondholders to stop Dynegy Holdings from rejecting some personal property leases, as part of its alleged effort to avoid repaying "hundreds of millions of dollars."

Both filings were made with the U.S. bankruptcy court in Poughkeepsie, New York, which is handling the proceedings.

Dynegy spokeswoman Katy Sullivan said the company is reviewing the filings.

Under federal bankruptcy law, a judge may appoint an examiner to investigate a debtor for the benefit of creditors, equity investors and the bankruptcy estate.

The examiner may investigate allegations, including fraud, dishonesty, incompetence, mismanagement and other misconduct.

A finding that current or prior management has done something wrong could undermine support for a reorganization.

In July 2010, an agreement to help Tribune Co emerge from bankruptcy collapsed after an examiner in that case identified possible legal claims tied to that publisher's $8.2 billion leveraged buyout.

US Bank said it is the trustee for financings related to leases associated with Dynegy Holdings' acquisition of the Roseton and Danskammer electric power generating plants in Newburgh, New York.

The bank said the September asset transfer "clearly was unfair to Dynegy Holdings and its creditors."

It also said Dynegy Holdings' board "knew its actions were improper," while the parent violated laws protecting creditors from self-dealing and fraudulent transfers.

Dynegy's holding company hopes to restructure $4 billion of debt, and has support from bondholders with about $1.4 billion of that debt.

It is more common in bankruptcy for bondholders to be paid prior to shareholders, who often receive nothing.

Dynegy shares closed down 1 cent at $2.95 Friday on the New York Stock Exchange. They fell 10.6 percent this week.

The case is In re: Dynegy Holdings LLC et al, U.S. Bankruptcy Court, Southern District of New York, No. 11-38111.