| WILMINGTON, Del
WILMINGTON, Del May 2 Energy Future Holdings
Corp, Texas's biggest power company that filed for bankruptcy on
Tuesday, received court approval on Friday for its generating
business to borrow more than $2 billion.
The company, formerly known as TXU Corp, reduced the
originally proposed $2.7 billion loan to its TCEH generating
business by more than $300 million after overnight talks with
lower-ranking creditors who said the borrowing was excessive.
TCEH, or Texas Competitive Electric Holdings Co, needed
money to pay employees and suppliers and meet regulatory
requirements. The business owns Luminant generating plants and
the TXU Retail power company.
Energy Future filed one of the largest Chapter 11
bankruptcies in U.S. history after a year of struggling to work
out a deal with its creditors. The company said it plans to exit
bankruptcy in a year.
It was the target of a record $45 billion buyout in 2007
that loaded it with debt just as electricity prices began to
fall. The deal was led by KKR & Co LP, TPG Capital
Management LP and the private equity unit of Goldman
Sachs Group Inc.
At Friday's hearing in U.S. Bankruptcy Court in Wilmington,
Delaware, Edward Sassower, a Kirkland & Ellis attorney who
represents Energy Future, said the company "worked into night"
to resolve objections to the borrowing.
The borrowing was approved by Judge Christopher Sontchi, who
also presided over hours of arguments and testimony during
Energy Future's first bankruptcy hearing on Thursday.
Energy Future and its creditors will return to battle in
court again beginning June 5.
At that hearing, the TCEH unit will seek final approval to
increase the borrowing limit to about $4.475 billion and a loan
of more than $7 billion for its business that owns a network of
Lower-ranking creditors filed notices that they will begin
deposing Energy Future executives including Paul Keglevic, the
chief financial officer, next week as they gather evidence to
try to prove the company has the ability to pay them.
The company has proposed splitting its Luminant and TXU
Retail business and turning it over to lenders who are owed
about $24.4 billion.
Lower-ranking creditors of that business stand to recover
less than 3 percent of what they are owed.
Energy Future also proposed, its other main business, a
holding company that owns the Oncor network of power lines, will
emerge from bankruptcy under the control of that unit's
The proposal for Oncor's holding company is opposed by its
highest-priority creditors because it would retire their loans
before the maturity date without an added "make-whole" payment
that those creditors say they are owed. Oncor did not file for
The case is In re: Energy Future Holdings Corp, U.S.
Bankruptcy Court, District of Delaware, No. 14-10979.
(Editing by Grant McCool)