Energy Future files sixth amended plan to incorporate PIK proposal

By Caroline Salls

Pittsburgh, Dec. 30 – Energy Future Holdings Corp. filed a sixth amended plan of reorganization and related disclosure statement with the U.S. Bankruptcy Court for the District of Delaware.

The amended plan incorporates a previously announced make-whole premium payment settlement reached with holders of the Energy Future Intermediate Holdings’ (EFIH) first-lien and second-lien noteholders.

According to the disclosure statement for the sixth amended plan, restricted holders of EFIH unsecured note claims did not accept the first-lien and second-lien settlements within 24 hours of the approval by an EFIH settlement board.

However, the company said professionals representing an informal group of unsecured noteholders told the Energy Future/EFIH debtors on Dec. 16 that subject to the execution of a plan support agreement, the informal group would be willing to support an amended plan with modified terms.

Plan proposal

The changes proposed by that PIK noteholders’ plan include the following:

• The debtors would escrow the maximum amount that could ultimately be allowed as of the plan effective date for the first-lien and second-lien noteholders’ make-whole claims and additional interest on those claims for a period of no more than three years until the claims are allowed and paid in full in cash.

Reorganized EFIH will have no obligation to fund the claims reserve with cash on hand after the plan effective date;

• The first-lien and second-lien notes trustees will receive a lien on the reserve until the make-whole claims are paid in full or disallowed;

• A make-whole litigation oversight committee will be appointed upon entry of the plan confirmation order and will be comprised of three representatives appointed by the PIK noteholders’ group;

• The oversight committee will have the independent right to litigate and settle the first-lien and second-lien make-whole claims;

• If the make-whole claims are ultimately disallowed by final order, the liens of the notes trustees on the claims reserve will be released;

• An Energy Future Holdings creditor recovery pool will consist of the equivalent of the cash on hand at the holding company as of the plan effective date and any amounts remaining in a distribution account after satisfaction of all allowed claims, including a 100% recovery to holders of allowed class B6 claims on account of the allowed PIK claim, satisfaction of all company make-whole fees and satisfaction of oversight committee fees; and

• Holders of allowed claims against the holding company debtors will receive a share of the equivalent of the cash on hand at the holding company on the effective date or as soon as possible thereafter, and holders of allowed class B6 claims will not receive a recovery on account of any claims other than the allowed PIK claims.

Unlike the EFIH secured creditor plan support agreement.

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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