Southern Montana Electric member wants power purchase agreement voided

By Lisa Kerner

Charlotte, N.C., April 13 - Southern Montana Electric Generation and Transmission Cooperative, Inc. member Beartooth Electric Cooperative, Inc. is seeking a declaratory judgment against Southern Montana relating to an amended wholesale power contract used to secure financing, according to documents filed with the U.S. Bankruptcy Court for the District of Montana on Friday.

On Dec. 19, 2008, Beartooth executed an amended wholesale power contract under which it agreed to purchase its power requirements from Southern Montana until Dec. 31, 2048.

In February 2010 Southern Montana used its rights under the amended power contract to help secure $85 million of senior first mortgage notes, series 2010A and series 2010B maturing on Dec. 31, 2048, the filing said.

Beartooth is asking the court to declare the amended power contract void for lack of consideration and to declare that the contract's use as a guarantee of Southern Montana's long-term debts is void for lack of approval.

Southern Montana filed for bankruptcy on Oct. 21, 2011 in the U.S. Bankruptcy Court for the District of Montana. The Billings, Mont.-based cooperative's Chapter 11 case number is 11-62031.

© 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.