Legal News

Dynegy gets Blocked by U.S. in its Plan to Leave Bankruptcy
Download PDF
1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)
Loading...

Just when Dynegy had drafted a plan that made their creditors cheer, U.S. Trustee Tracy Hope Davis went and shot it all down. Dynegy Inc., to manage its cumulative debts of over $5 billion, declared bankruptcy. But they made a reorganization plan that would render them a seven-member board after it left bankruptcy, a plan that would pay creditors 59 to 89 cents on the dollar in cash and equity. Creditors holding $3.5 billion in claims representing 99 percent of the vote approved of the plan.

Dynegy’s woes are due to the falling prices of electricity, which they produce and sell on the open market. They had hoped to emerge from bankruptcy, both Dynegy Inc, which filed last September, and Dynegy Holdings LLC, which filed in July, from chapter 11 bankruptcies, but their plan may freeze out third parties from bringing legitimate liability claims.

Though given an overwhelming go ahead, Not so fast, says Davis. She filed an objection Monday in the U.S bankruptcy court of Poughkeepsie, New York, disputing it because the plan failed to show its proposed “broad, non-consensual third party releases of liability” are bankruptcy law compliant.

  
What
Where


“A nondebtor release is a device that lends itself to abuse,” she wrote. “Unless and until the debtors meet their burden in demonstrating compliance with the law of this circuit and the bankruptcy code, the court should decline to confirm the plan as proposed.” She cited a 2005 decision by the New York federal circuit court of appeals to back this up.

Dynegy responded through Katy Sullivan, saying that “Our plan received widespread support from creditors and we will respond to the U.S. Trustee’s objections through the established legal processes.”

Get JD Journal in Your Mail

Subscribe to our FREE daily news alerts and get the latest updates on the most happening events in the legal, business, and celebrity world. You also get your daily dose of humor and entertainment!!






 

Interesting Legal Sites You May Like


BCG FEATURED JOB

Locations:

Keyword:



Search Now

Senior Land Use Attorney with experience

USA-CA-San Francisco

San Francisco office of our client seeks senior land use attorney with 7+ years of experience. The c...

Apply Now

Immigration Attorney with portable business

USA-VA-McLean

McLean office is seeking an immigration attorney with $500,000+ in portable business.

Apply Now

Employment Attorney with 3+ years of wage and hour litigation experience

USA-CA-Los Angeles

Los Angeles office of our client seeks employment attorney with 3+ years of experience in wage and h...

Apply Now

Litigation Attorney with 3-6 years of experience

USA-IL-Chicago

Chicago office of our client seeks litigation attorney with 3-6 years of experience and exposure to ...

Apply Now

RELEVANT JOBS

Experienced Civil Litigation Paralegal

USA-CA-San Diego

Civil litigation / insurance defense law firm in UTC is seeking a full time, experienced litigation ...

Apply now

Associate Attorney

USA-CA-San Diego

Busy, mid-sized San Diego based civil and complex litigation firm working throughout the state is se...

Apply now

Experienced Legal Secretary

USA-CA-San Diego

Busy mid-sized law firm in the UTC area is seeking a full time, experienced legal secretary.  A...

Apply now

Legal Secretary

USA-NJ-Morristown

A fulltime legal secretary with experience in working for a litigation firm in New Jersey. Experienc...

Apply now

Most Popular

SEARCH IN ARCHIVE

To Top