Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Energy Future Holdings Rejects Alternative Bankruptcy Plan
Author: Joel R. Glucksman
Date: July 1, 2014
Key Contacts
Back
An update in one of the largest bankruptcy proceedings seen by the U.S. in recent history came the afternoon of June 24, when it was reported that Energy Future Holdings rejected an alternative restructuring plan.
The plan, which was advanced by a group of EFH investors, would have allowed junior creditors to recover more money than under the company’s own plan, and would have left NextEra Energy with a more profitable business, according to Bloomberg. The plan was floated June 18 by NextEra and investors in Energy Future’s Oncor transmission business in a letter to EFH CFO Paul Keglevic.
The group explained that, together with a $2.3 billion loan, the reorganization would follow the company’s plan for a tax-free assets spinoff, but would give unsecured lenders more value, the news source reported. Within the 30 days following the loan’s issuance, NextEra would seek an all-stock merger with the unit that controls Oncor.
Energy Future Intermediate Holding, or EFIH, rejected the proposal late on June 23 in favor of the proposal that it was already advancing, according to Reuters. NextEra, which is the largest generator of renewable energy in the U.S., had planned to contribute $1 billion to the proposal in the form of a loan to covert to EFIH equity. Despite EFIH rejecting the plan, NextEra shares were up 1.3 percent to $100.76 – almost a one-year high – in afternoon trades on the New York Stock Exchange. A company spokesperson told the news source that NextEra does not comment on potential transactions.
Energy Future filed for protection under Chapter 11 of the bankruptcy law in April, in an attempt to restructure more than $40 billion worth of debt. Most of this debt was taken on in 2007, in a massive buyout of TXU Corp in a bet that the price of natural gas would soon increase. This turned out to be false, and the price of natural gas fell precipitously.
If you have any questions about this post or would like to discuss your company’s creditors’ rights and bankruptcy matters , please contact me, Joel R. Glucksman at ScarinciHollenbeck.com.
- Practices: Bankruptcy & Creditors' Rights, Corporate Transactions & Business, Bankruptcy Litigation
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
The Due Diligence Process for NY Condominiums and Cooperatives
While the New York City real estate market can be extremely competitive, moving too quickly often backfires. Before purchasing a condominium or cooperative in New York City, it is important to do you homework. Purchasing property in NYC can involve a dizzying number of legal issues. These include condo and co-op rules, rent restrictions, and […]
Author: Jesse M. Dimitro
Smart Contract Legal Issues: Drafting Agreements for Blockchain
Smart contracts feature a unique blend of legal agreement and technical code. This innovation has the potential to reshape how business is conducted. At the same time, smart contract legal issues around enforceability, jurisdiction, identity, and compliance are common. The legal framework for these self-executing agreements is still evolving. What Are Smart Contracts? Smart contracts, […]
Author: Bryce S. Robins
Are Stay Interviews the Key to Retaining Top Talent?
Retaining top talent continues to be one of the greatest challenges facing employers today. Even in an employer’s market, the loss of a key employee can disrupt operations and result in significant costs. While compensation plays a role, long-term retention often depends on workplace culture, communication, and employee engagement. One increasingly popular strategy for improving […]
Author: Angela A. Turiano
Why Secured Transactions Are Important
Secured transactions form the backbone of a wide range of business dealings, including business loans, mortgages, and inventory financing. Because the stakes are often high and relatively minor oversights can have drastic consequences, lenders and borrowers should thoroughly understand how to form an enforceable security agreement that protects their legal rights. What Is a Secured […]
Author: Dan Brecher
Don’t Cash a “Paid in Full” Check Without Understanding the Legal Implications
Cashing a check marked “paid in full” can be a risky endeavor, particularly if you don’t fully understanding the legal implications. If you are owed more than the amount of the check you accept and deposit, you may waive your right to collect the full disputed amount. That is why you should consider either rejecting […]
Author: Dan Brecher
Changes to Qualified Small Business Stock Will Benefit Startup Founders and Investors
The One Big Beautiful Bill Act of 2025 (OBBBA) significantly impacts federal taxes, credits, and deductions. A key change relating to Qualified Small Business Stock (QSBS) allows greater tax-free gains for investments in startups and other qualifying small businesses. Company founders and other investors should understand how the enhanced tax strategy works or risk missing […]
Author: Dan Brecher
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.