Ector County Energy files Chapter 11 plan of liquidation

By Sarah Lizee

Olympia, Wash., Aug. 9 – Ector County Energy Center LLC filed a Chapter 11 plan of liquidation and related disclosure statement Tuesday with the U.S. Bankruptcy Court for the District of Delaware.

The plan provides for the distribution of about $150 million in proceeds from a going-concern sale of the debtors’ operating assets, as well as proceeds from any other recoveries, to holders of allowed claims.

Holders of administrative expense claims, priority tax claims and other priority claims will be paid in full.

Holders of prepetition term lender claims will receive their pro rata share of payment in cash equal to the $55 million minimum term lender distribution, plus any distributable value so that, inclusive of the minimum term lender distribution, holders will receive up to the amount of their claims. In the event there remains an amount of these claims outstanding, holders will also receive their pro rata share of payment in cash of any distributions made under the wind-down reserves waterfall until the claims have been paid in full.

Holders of prepetition revolving lender claims will receive payment in full in cash for any unsatisfied balance of their reasonable fees and expenses, and the right to draw on any funds held in the letter-of-credit cash collateral accounts upon any draw on any letter of credit issued.

Holders of other secured claims will receive payment in full in cash, the collateral securing their claims, or other treatment in line with section 1129(b) of the bankruptcy code.

Holders of class 5A general unsecured claims against the debtor that are not plaintiffs in the Texas litigation will receive their pro rata share of the $5 million minimum unsecured claim distribution, plus any distributable value remaining after the payment in full of the allowed prepetition term lender prepayment claims, plus their pro rata share of payment in cash of any distributions made under the wind-down reserves waterfall after satisfaction of the prepetition term lender prepayment claims, plus their pro rata share of any portion of the $1 million class 5B reserve amount not distributed to holders of class 5B claims.

Holders of class 5B general unsecured Texas MDL claims will receive authority and relief from any stay, injunction, order or prohibition against liquidating, but not collecting, the amount of their claims; authority and relief from any stay, injunction, order or prohibition against recovering any claim from and only to the extent of the insurance policies; and their pro rata share of the class 5B reserve amount.

Interests will be canceled. Despite that, holders will receive all distributable value remaining, if any, after payment of senior claims in full.

Goldsmith, Tex.-based Ector owns and operates a 330 MW natural gas-fired electricity-generating facility. The company filed Chapter 11 bankruptcy on April 11 under case number 22-10320.

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