Bosque lenders ask court to limit exclusivity to allow competing plan

By Caroline Salls

Pittsburgh, July 16 - Bosque Power Co., LLC's pre-bankruptcy agent and lender group has asked the U.S. Bankruptcy Court for the Western District of Texas to limit the company's exclusivity to the initial period, which expires on July 22, according to a Friday court filing.

The lenders said that Bosque has yet to hold plan talks with them after four months in bankruptcy, although the company's case is "relatively simple."

According to the motion, the company has no employees and its only material asset is operated by third-party contractors and subject to the undisputed liens of the pre-bankruptcy lenders.

The lender group added that equity sponsor Arcapita Bank plans to instruct Bosque to file a plan that does not pay creditors in full and delivers valuable estate property to Arcapita.

As a result, the lenders said Arcapita will continue to control the company's equity.

The agent and lender group said they are prepared to propose a plan that pays all creditors, except pre-bankruptcy secured parties, in full or leaves their rights unaltered.

Specifically, under the lenders' plan:

• Pre-bankruptcy secured parties would receive a share of 100% of new securities issued by the reorganized company;

• Mechanics' liens claims, administrative claims, priority claims and general unsecured claims would be paid in full in cash;

• All executory contracts and unexpired leases not previously assumed or rejected will be deemed assumed; and

• The company would receive exit financing with a cash infusion for operating expenses and working capital purposes.

A hearing is scheduled for Tuesday.

Bosque, a Laguna Park, Texas-based power company, filed for bankruptcy on March 24. Its Chapter 11 case number is 10-60348.

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