Calpine considers alternate reorganization plan structure, asks court to delay disclosure hearing

By Jennifer Lanning Drey

Portland, Ore., July 27 - Calpine Corp. has been contacted by potential sponsors of an alternate plan of reorganization based on a structure that would provide guaranteed distributions to the company's stakeholders, according to a Thursday filing with the U.S. Bankruptcy Court for the Southern District of New York.

Accordingly, the hearing for approval of the disclosure statement for Calpine's plan of reorganization has been adjourned to Sept. 11 from Aug. 8 to allow time for Calpine to evaluate the prospects of a guaranteed plan and for potential sponsors to conduct due diligence.

In the motion, Calpine told the court it has decided to take a brief period of time to investigate the possibility of an alternate plan structure that could offer recoveries that are superior to those under the current "waterfall" plan.

The company, with the assistance of its investment banker Miller Buckfire & Co., has begun to gauge potential investors' interest in sponsoring a guaranteed distribution plan that would not compromise what Calpine believes is an appropriate balance sheet upon emergence, according to the filing.

Calpine has distributed requests for proposals in connection with a guaranteed distribution plan to potential investors and has asked for final commitment letters to be submitted by Aug. 16.

The company said it remains committed to emerging from bankruptcy "as soon as possible" and no later than Jan. 31, 2008.

Calpine, a San Jose, Calif., power company, filed for bankruptcy on Dec. 20, 2005. Its Chapter 11 case number is 05-60200.

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