October 14, 2016
Curtis Represents Paulson & Co. in Chapter 11 Cases of Energy Future Holdings
Curtis is representing Paulson & Co. in the Chapter 11 cases of Energy Future Holdings Corp., (“EFH”) in the United States Bankruptcy Court for the District of Delaware before Judge Christopher S. Sontchi.
Curtis is representing Paulson & Co. with respect to its holdings of Texas Competitive Electric Holdings (“TCEH”) First Lien Notes, and its membership in the TCEH First Lien Ad Hoc Committee. The TCEH First Lien claims consist of three major groups: borrowings under a credit agreement (the “Bank Debt”), the Notes, and various swap and hedging agreements (the “Swaps”). Under the confirmed Chapter 11 Plan for EFH subsidiaries affiliated with TCEH, the First Lien claims will receive 100% of the equity in Reorganized TCEH, plus certain other consideration including rights related to potential tax benefits.
The allocation of First Lien claims among the Notes, Swaps, and Bank Debt was contentious, and is subject to resolution of an ongoing adversary proceeding in the United States Bankruptcy Court for the District of Delaware. Curtis has advised Paulson & Co. in this litigation, and worked closely with counsel to the Notes Indenture Trustee and First Lien Ad Hoc Committee to advance the interests of the Notes claimholders.
To prevent delayed confirmation of the TCEH Plan, the First Lien claimholders agreed to establish a reserve which will hold Plan distributions until a resolution of the allocation dispute is obtained (the “Reserve”). The establishment of the Reserve proved to be highly contentious as well, however, Curtis helped the Notes achieve their main objectives in entry of an Order by Judge Sontchi establishing the terms of the Reserve. The ultimate resolution of the allocation dispute has the potential to transfer in excess of $100 million of consideration from Swap and certain Bank Debt claimholders to the Notes and other Bank Debt claims.
The Curtis team working on this matter is led by Restructuring and Insolvency Partner Steven J. Reisman and Restructuring and Insolvency Litigation Partner Theresa A. Foudy.