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Energy Future notes payment suit dismissed; objection still allowed
By Caroline Salls
Pittsburgh, June 15 – Energy Future Holdings Corp. indenture trustee UMB Bank, NA won dismissal of a complaint filed by Energy Future Intermediate Holding Co. LLC and EFIH Finance Inc. (EFIH debtors) related to prepayment penalties and post-bankruptcy interest in connection with the repayment of the PIK notes, according to an opinion filed Monday by the U.S. Bankruptcy Court for the District of Delaware.
In Monday’s opinion, judge Christopher S. Sontchi said he granted the trustee’s motion to dismiss “as there are too many unknown factors relating to the repayment of the PIK notes to determine whether prepayment penalties and post-petition interest would be due under the terms of the PIK note indenture.”
However, Sontchi said nothing in the opinion prevents the EFIH debtors from objecting to the trustee’s proof of claim on behalf of the PIK noteholders for prepayment penalties and post-bankruptcy interest or seeking to liquidate the claim.
Specifically, the trustee filed a claim of $1,647,000,000, plus interest, fees and other amounts arising under the indenture.
According to the filing, the trustee asked the court to dismiss the complaint for lack of subject matter jurisdiction, alleging that the EFIH debtors presented no case or controversy in the complaint, and thus, the issues are not ripe for adjudication.
The trustee also said the EFIH debtors have not paid the PIK notes and the circumstances of any payment cannot be known at this time.
Energy Future, a Dallas-based power generation company and utility operator, filed for bankruptcy on April 29, 2014. The Chapter 11 case number is 14-10979.
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