WILMINGTON, Del.--Federal bankruptcy monitors have named seven
creditors to the influential panel that will speak for unsecured
creditors in the $42 billion bankruptcy of Energy Future Holdings
Corp.
Trustees for two big bond issues endangered by the Texas
power-seller's restructuring proposal earned seats on the official
committee of unsecured creditors. The committee's lawyers and other
advisers will be paid by Energy Future, and its voice will be heard
as Energy Future attempts to stay on course for an exit from
bankruptcy early next year.
In an email, Energy Future spokesman Allan Koenig said the
company looks forward to working with the official committee as it
attempts to enlist support for its Chapter 11 workout plan, which
is backed by "key financial stakeholders," but opposed by unsecured
creditors of one major division.
"We are committed to working as efficiently as possible to
restructure our balance sheet," he added.
Wilmington Savings Fund Society, a bond trustee that has already
challenged the Texas power-seller's restructuring plan, earned a
seat, as did Law Debenture Trust Co. of New York, trustee on more
than $5 billion of unsecured bonds attached to the Texas
Competitive Electric side of Energy Future's sprawling
business.
Bank of New York Mellon, trustee on a number of bond issues, was
also selected for the panel, along with the quasigovernmental
retirement pay safety net, the Pension Benefit Guaranty Corp. Three
trade creditors rounded out the panel.
Energy Future has said its Chapter 11 bankruptcy proceeding
poses no threat to its business operations or employees, and is
simply an attempt to shift billions of dollars worth of debt off
its balance sheet, by swapping some of it for equity in a pair of
reorganized companies.
Unsecured creditors of one Energy Future subsidiary, Energy
Future Intermediate Holding, support the company's proposal, which
would give them a stake in a reorganized company that owns 80% of
Oncor, the Texas transmission business.
Unsecured creditors of Texas Competitive Electric, including
those represented by some of the bond trustees that won committee
seats, oppose Energy Future's Chapter 11 proposal, which means
little or no recovery for them.
The selections were announced by Richard Schepacarter, an
attorney with the Office of the U.S. Trustee, an arm of the
Department of Justice that monitors the bankruptcy court. Mr.
Schepacarter interviewed creditors seeking seats on the committee
throughout the day Monday, as about 150 bankruptcy professionals
milled around the halls of a Wilmington hotel, waiting to pitch
their qualifications to work on one of the biggest Chapter 11 cases
ever filed.
Energy Future sought bankruptcy protection April 29, having
tried and failed to win sufficient support to guarantee a smooth
slide through court with a restructuring plan hammered out in
months of negotiations.
Write to Peg Brickley at peg.brickley@wsj.com
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