Brazos Electric committee asks court to establish case milestones

By Sarah Lizee

Olympia, Wash., July 20 – Brazos Electric Power Cooperative, Inc.’s official committee of unsecured creditors filed a limited objection Monday to the company’s motion seeking an extension of its exclusive periods to file and solicit votes on a Chapter 11 plan.

While the committee does not oppose the exclusivity extension in general, it has asked the U.S. Bankruptcy Court for the Southern District of Texas to establish certain case milestones.

“Capital markets are open and interest rates are at near historic lows, allowing the debtor to raise the necessary funds through securitization at minimal cost to the ultimate ratepayers, but interest rates could rise at any time and access to cash could be restricted in the future,” the committee said.

“Therefore, time is of the essence, and the committee has proposed milestones for actions that must be taken to access the markets as soon as possible.”

While the committee said it understands that Brazos is considering the milestones, as of Monday the company had not yet agreed to them.

As such, the committee is requesting that the court incorporate the milestones into an order granting the exclusivity extension.

Under the proposed milestones, the company must file objections against major electric, gas and power claims and deliver a reasonably detailed claims reconciliation analysis of other claims filed by the June 15 bar date to the committee by Aug. 6.

By Aug. 31, the company must deliver a reasonably detailed claims reconciliation analysis of claims filed by the Aug. 5 tort claims bar date to the committee and file an application to retain a bulge bracket bank/market maker that is an expert in securitization finance to serve as lead bank for a securitization and exit financing.

The company must present a proposal to member cooperatives for rate increases to fund a securitization and exit financing.

As previously reported, the company asked the court to extend the plan filing period through Oct. 27 and the solicitation period through Dec. 28.

The company said significant work is required before it can prepare a meaningful disclosure statement, propose a Chapter 11 plan and emerge from Chapter 11.

The debtor’s claims review and reconciliation processes have only just started and can’t be completed until sometime after the tort claims bar date, and the governmental bar date, which is Sept. 3.

The company is also analyzing a number of potential restructuring strategies and transactions.

Brazos Electric is a 3,994-megawatt generation and transmission cooperative based in Waco, Tex. The company filed bankruptcy on March 1 under Chapter 11 case number 21-30725.

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