| WILMINGTON, Del
WILMINGTON, Del May 22 An attorney for Texas'
leading power company, the bankrupt Energy Future Holdings, told
a court hearing on Thursday that it will delay seeking court
approval of a restructuring support agreement that lays a path
out of Chapter 11.
At the start of a two-day hearing on a request to move the
bankruptcy case to Dallas from Wilmington, Delaware, Edward
Sassower said Energy Future will postpone to June 30 from June 6
a hearing to approve its restructuring support agreement, known
as an RSA.
The agreement commits the company to meet certain milestones
on its way to slash its $42 billion in debt. Creditors wanted
more time to study the deal.
"As a result of working to accommodate the unsecured
creditors committee timing request ... we will adjourn the RSA
assumption motion," Sassower, a partner in Kirkland & Ellis,
said at the start of Thursday's hearing.
The plan involves splitting off the subsidiary that owns the
Luminant power generating business and TXU Retail, and turning
those businesses over to senior creditors in return for
forgiving some of the $24 billion they are owed. The plan is
opposed by that subsidiary's junior creditors, who also want the
case transferred to Dallas.
The plan also proposes that a separate Energy Future
subsidiary that owns Oncor, a power transmission business that
is not bankrupt, will emerge from bankruptcy under the control
of the subsidiary's junior unsecured creditors.
Most of Thursday's hearing focused on the unusual request by
Wilmington Savings Fund Society (WSFS), a Delaware-based
representative of junior creditors, to move the case to Dallas.
Energy Future filed for bankruptcy in April in Wilmington.
The company was burdened by debt stemming from its 2007 record
leveraged buyout of TXU Corp, led by KKR & Co, TPG and the
private equity arm of Goldman Sachs.
Energy Future has subsidiaries incorporated in Delaware, and
there is no dispute it can file in the state's busy U.S.
Bankruptcy Court. The court has handled many big bankruptcies
with no real connection to the state, such as the Los Angeles
Dodgers baseball team.
WSFS argued that the U.S. Bankruptcy Court in Dallas, near
Energy Future's headquarters, would better serve parties
affected by the bankruptcy.
"All the employees work and live in Texas, not in Delaware.
All the assets are in Texas, none in Delaware. All the customers
are in Texas, none in Delaware," said Jeffrey Jonas, a partner
in Brown Rudnick and an attorney for WSFS.
The company's general counsel, Stacey Dore, testified she
chose Delaware because most of the restructuring parties and
their advisers were in New York. She said it was cheaper because
the company has to pay many of the costs of its creditors.
"Our conclusion was customers would not care where we filed
for bankruptcy," Dore said. "We are not changing our customer
programs and contracts."
Testimony and argument on the venue dispute is scheduled to
continue into Friday.
The case is In re Energy Future Holdings, U.S. Bankruptcy
Court, District of Delaware, No. 14-10979
(Reporting by Tom Hals in Wilmington, Delaware; Editing by Jan