| Add to balance / Manage account | User: | Log out |
| Prospect News home > News index > List of issuers E > Headlines for Energy Future Holdings Corp. > News item |
Energy Future notes trustee’s premium payment suit dismissed by court
By Caroline Salls
Pittsburgh, June 3 – Energy Future Holdings Corp.’s second-lien notes trustee’s motion to dismiss a lawsuit filed by the first-lien notes trustee in an effort to recover an applicable premium from second-lien noteholders who received a partial paydown of their notes by Energy Future was approved Friday by the U.S. Bankruptcy Court for the District of Delaware.
In Friday’s opinion, judge Christopher Sontchi said “matters continued to develop” while the dismissal motion was being briefed.
Specifically, the court ruled in a separate adversary proceeding, that the first-lien noteholders could only recover the premium under the first-lien indenture if there was an optional redemption of the first-lien notes. The court also found that the first-lien notes were automatically accelerated by Energy Future’s bankruptcy, and the first-lien indenture did not provide for payment of the premium following a bankruptcy acceleration.
After that, Sontchi said the court denied the first-lien trustee’s motion for relief from the automatic stay imposed by the bankruptcy filing to decelerate the first-lien notes.
“As a result, the applicable premium never became due under the first-lien indenture,” according to Friday’s ruling.
“Thus, under the current landscape between the parties to this adversary, the court is left to determine whether the first-lien trustee can recover the amount of the applicable premium from the second-lien noteholders when such amount is not due as against the EFIH debtors.”
Since the amounts are not due, the judge said they are not recoverable from the second-lien noteholders.
Energy Future, a Dallas-based power generation company and utility operator, filed for bankruptcy April 29, 2014. The Chapter 11 case number is 14-10979.
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.