Energy Producer Subsidiary Dynegy Holdings Files Chapter 11 Bankruptcy
Dynegy Holdings, a subsidiary of Dynegy, Inc., a major energy producer, filed for bankruptcy protection under Chapter 11 in November 2011. The parent company, Dynegy, Inc. did not file for bankruptcy protection, however. The parent company boasts of shareholders that include Carl Icahn, the billionaire investment guru, as well as Seneca Capital, a major investment firm. Notably, other subsidiaries of parent, Dynegy, Inc. have also not filed bankruptcy.
Status of Dynegy Holdings' Bankruptcy Proceedings
Dynegy Holdings recently announced that it came to an accord with some investor parties on how best to restructure the company's debt burden through bankruptcy proceedings. According to the company, investors holding more than a billion dollars of Dynegy Holdings' more than $3 billion in senior notes were part of the agreement regarding the company's refinancing plans. Those refinancing plans incorporate a hefty $400 million payment in cash and the issuance of two types of notes.
Expensive Power Plant Leases Need to Be Overhauled
The company's agreement with some of its investor constituents permits the subsidiary to revamp costly leases for some of its power plants (such as Roseton and Danskammer) and to take away some of the company's huge debt burden. Not surprisingly, Dynegy, Inc., the parent entity, warned investors and the public that a restructuring of its $5 billion debt burden was necessary or the entire company (including the parent) would soon land in bankruptcy. The subsidiary holding company has among its assets two power plants that are leased and are currently considered unprofitable holdings. In fact, these two power plants comprise more than one-half of the total debt of Dynegy, Inc., the parent company. In addition to the Roseton and Danskammer power plant leases being part of the restructuring and refinancing deal brokered with investors within the bankruptcy, the company also plans to seek approval from the bankruptcy court to terminate the leases. Of course, state and federal regulatory approvals would be required to do so.
Financial Snapshot of Dynegy Holdings
Dynegy Holdings and four subsidiary entities scheduled $13.8 billion dollars in total assets in their publicly filed bankruptcy pleadings. The holding company listed just over $6 billion in liabilities in those same bankruptcy court filings. According to the company, those figures were current as of Sept. 30, 2011. The holdings subsidiary was staring at a staggering $700 million dollars in future lease payments for the next five years.
If you have a claim, question, or concern about the Dynegy Holdings'bankruptcy case, it is prudent to contact the trustee assigned to the case, as well as bankruptcy or creditors' rights counsel. These parties can offer you information as to your rights, remedies, and available options for next steps.