Attorney: Energy Future TCEH plan effective date should not be delayed

By Caroline Salls

Pittsburgh, Sept. 26 – Energy Future Holdings Corp. counsel Marc Kieselstein of Kirkland & Ellis LLP disputed in a letter to the U.S. Bankruptcy Court for the District of Delaware a claim that the unsecured group and indenture trustee for the company’s Texas Competitive Energy Holdings (TCEH) debtors are entitled to some or all of a $550 million cash settlement amount on the TCEH debtors’ plan effective date.

Kieselstein said the order confirming the TCEH debtors’ plan includes a provision that expressly provides that the TCEH cash payment will be paid into an escrow account on the effective date for the benefit of the unsecured debtholders, rather than directly to the trustee.

“This provision was negotiated with counsel to the TCEH unsecured group, which did not object to the TCEH confirmation order,” the letter said.

“Moreover, delaying the TCEH effective date until a cash distribution could be made directly to the indenture trustee would provide no benefit to the TCEH unsecured group while materially – and gratuitously – prejudicing ‘other T-side parties in interest.”

Kieselstein said remaining claims allowance disputes on the TCEH side “should not prohibit reorganized TCEH from emerging from these Chapter 11 cases on Oct. 3,” the expected TCEH plan effective date.

“Reorganized TCEH - a multibillion operating company – would be delayed in its long-awaited emergence from Chapter 11, postponing the appointment of the new board, frustrating the ability to pursue business opportunities that it has been unable to pursue in Chapter 11 and adding to the incremental administrative expense of this restructuring,” Kieselstein said.

“Yet, whether the $550 million is escrowed or not, the TCEH unsecured group must wait for a determination of disputed claims to receive a distribution.”

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.

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