| July 24
July 24 Energy Future Holdings, the largest
power company in Texas, asked a judge to extend the period in
which it controls its Chapter 11 bankruptcy and said it is
scrapping its original debt-cutting plan in favor of an auction
of its Oncor unit.
The company asked Delaware Bankruptcy Judge Christopher
Sontchi to extend its exclusive right to seek a creditor vote on
a plan of reorganization until April 25, 2015 from its current
deadline in October.
The company filed for bankruptcy on April 29, 2014 with a
restructuring support agreement, or RSA, with some creditors
that aimed to get a plan to cut its $40 billion in debt approved
by Sontchi before February.
"Since the Debtors have filed for Chapter 11, certain
parties have made potentially higher or better offers to the
debtors and the debtors have decided to terminate the RSA to
pursue such potential offers," the company's lawyers said in a
Wednesday court filing.
Energy Future's original plan triggered lawsuits by
creditors, demands that it slow down the process and attracted
the interest of potential buyers such as NextEra Energy Inc
. Sontchi expressed skepticism about the company's
approach to its restructuring plan on July 1.
Energy Future now anticipates conducting a court-supervised
auction for itself and its EFIH subsidiary, which owns 80
percent of the Oncor power distribution business, according to a
Thursday securities filing.
The company said it remains committed to spinning off its
TCEH subsidiary, which owns the Luminant power generating unit
and TXU Energy retail utility, to TCEH senior creditors. Those
creditors are owed $24 billion.
The success of that spin-off depends on how it is treated
for taxes. The company said in court documents it continues to
discuss the plan with the Internal Revenue Service.
Energy Future's original plan included borrowing $1.9
billion to finance a tender offer for the high-yielding
second-lien notes issued by its EFIH unit, which it said would
save millions of dollars a month in interest costs.
As a result of scrapping its original debt-cutting plan, the
company said that any notes that were tendered would be returned
to the holder and no payments would be made.
Many holders of those notes sued Energy Future over the
proposal because they said Energy Future was denying them an
early redemption fee.
Energy Future filed for bankruptcy after struggling for
years with low power rates, driven down by a glut in natural
gas. Its bankruptcy is among the largest ever in the United
States, with much of the debt taken on in the 2007 record
leveraged buyout of the former TXU Corp that was led by KKR & Co
, TPG Capital Management and the private equity
arm of Goldman Sachs.
The private equity firms are likely to recover next to
nothing in the bankruptcy.
(Reporting by Tom Hals in Wilmington, Delaware; Editing by Phil