Energy Future notes trustee opposes motion to bind creditors to votes

By Caroline Salls

Pittsburgh, Dec. 28 – Energy Future Holdings Corp. indenture trustee American Stock Transfer & Trust Co., LLC objected to the company’s motion to bind holders of claims and interests to their previous plan of reorganization votes in connection with its fifth amended plan, according to a Dec. 28 filing with the U.S. Bankruptcy Court for the District of Delaware.

“The limited solicitation motion must be denied because the fifth (or any subsequent) plan can only be confirmed if adversely affected EFH noteholders are provided with the opportunity to vote after receipt of an adequate updated disclosure statement,” the objection said.

“The plan modifications made in response to the extraordinary Third Circuit make-whole decision adversely and materially affect the treatment EFH noteholders were to receive under the prior plan.”

The indenture trustee proposed that the fifth plan be modified so that Energy Future creditors receive the value of net operating losses (NOLs) being acquired by NextEra and said that the disclosure statement should be amended to describe all facts related to the value of the NOLs.

In addition, the indenture trustee said the disclosure statement should state that a court-approved tax matters agreement essentially mandated that any sale of the Energy Future Intermediate Holdings debtor be undertaken in conjunction with a sale of the holding company and thus would include the sale of Energy Future Holdings’ NOLs.

American Stock said the votes of the noteholders should be resolicited and argued that the noteholders should have the right to withdraw consent to the releases contained in the fifth plan.

Finally, the indenture trustee said sufficient time must between the Jan. 4 disclosure statement hearing and the start of the confirmation hearing to allow the debtors to resolicit the votes of all noteholders.

Energy Future is a Dallas-based power generation company and utility operator. The company filed for bankruptcy on April 29, 2014. The Chapter 11 case number is 14-10979.

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