Energy Future secures court approval of amended plan support agreement

By Caroline Salls

Pittsburgh, Sept. 17 – Energy Future Holdings Corp. received court approval of an amended and restated plan support agreement on Thursday, according to an 8-K filed with the Securities and Exchange Commission.

The company said it entered into the amended support agreement and a related amended intercreditor arrangement settlement on Sept. 11.

Energy Future will seek court approval of the amended settlement at its plan of reorganization confirmation hearing.

As previously reported, Energy Future’s third amended plan calls for the reorganized Texas Competitive (TCEH) spinoff and a creditor and third-party backstopped Energy Future/Energy Future Intermediate Holding Co. LLC (EFIH) transaction.

Energy Future and EFIH entered into a purchase agreement and plan of merger with investor-group controlled acquisition entities Ovation Acquisition I LLC and Ovation Acquisition II LLC.

Under the merger and purchase agreement, the investor group will acquire reorganized Energy Future through a series of transactions at the time of the effective date of the third amended plan and immediately after completion of the reorganized TCEH spinoff.

Funds received by the purchasers under an equity commitment letter, debt commitment letter, rights offering and backstop will be used to facilitate the acquisition of reorganized Energy Future and fully satisfy the allowed claims of holders of claims and interests in Energy Future and EFIH in cash and, if applicable, to complete a Texas Transmission Investment LLC acquisition.

Earlier this month, U.S. Trustee Andrew R. Vara objected to plan support agreement, arguing that it is an improper, post-petition solicitation of votes in violation of the Bankruptcy Code.

More specifically, the trustee argued the agreement obligates parties to vote in support of a plan that provides for millions of dollars (and possibly billions) to be paid to not fewer than 45 non-estate retained professionals in undisclosed amounts and to undisclosed parties, much of which is required to be disclosed under the Bankruptcy Code and/or reviewed and approved by the court, the filing said.

Additionally, the trustee asserted that the plan contains further illegal provisions, such as the payment of a management incentive plan contrary to the Bankruptcy Code, as well as releases and exculpations that are overly broad, extend to a number of individuals who are not entitled to such protections and do not comply with the law of the Third Circuit, the filing also said.

Energy Future, a Dallas-based power generation company and utility operator, filed bankruptcy on April 29, 2014 in the U.S. Bankruptcy Court for the District of Delaware. The Chapter 11 case number is 14-10979.

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