Entergy New Orleans seeks court OK of procedures for distributing Hurricane Katrina insurance proceeds

By Caroline Salls

Pittsburgh, May 8 - Entergy New Orleans, Inc. requested court approval of a system for allocating and distributing insurance proceeds being paid in connection with Hurricane Katrina damages, according to a Monday filing with the U.S. Bankruptcy Court for the Eastern District of Louisiana.

Under an agreement with indenture trustee Bank of New York, any Hurricane Katrina-related insurance proceeds for Entergy New Orleans and parent Entergy Corp. are being held in a segregated, interest-bearing bank account until the court approves a protocol for their distribution.

Entergy received its first payment of $14.75 million for losses incurred by Entergy New Orleans and other operating companies.

Under the proposed protocols, Entergy will submit the insurance claims, and will calculate the ratio of each operating company's submitted claims and honored claims to the total submitted claims and honored claims.

Entergy will regularly update the allocation ratio and will prepare a revised insurance reimbursement statement based on the ratio of the operating company's pending claims and honored claims to the total of all pending and honored claims.

Also under the protocols, proceeds will be allocated on a cumulative basis. As additional costs are incurred, Entergy will file additional claims and will receive additional insurance proceeds that will alter the allocation ratio.

The final allocation of the proceeds and deductible will be based on the ratio of each operating company's actual honored claims to all of the actual honored claims.

To ensure that no operating company gets more than its share of the proceeds, when a company receives 75% of its estimated total recovery, it will not receive any more proceeds until all claims are adjusted and all proceeds are paid.

Entergy New Orleans provides electric and natural gas service to customers in New Orleans and is the smallest of Entergy Corp.'s five utility companies. Entergy New Orleans filed for Chapter 11 on Sept. 23, 2005. Its case number is 05-17697.

© 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.