Creditors of Energy Future Holdings Corp. want the company to delay the auction of its prize Oncor electricity-transmission unit while all sides negotiate a reorganization plan for the bankrupt power producer.
The company today submitted the final proposed rules for the multistep auction to U.S. Bankruptcy Judge Christopher Sontchi. In November, the judge said he would approve the auction rules if they were modified to give dissenting creditors more of a role.
Since then, Energy Future has been working out details for the auction and negotiating with creditors on a reorganization plan that would allow the company to cut debt and exit bankruptcy.
Energy Future holds an 80 percent stake in Oncor, the biggest electric transmission company in Texas. Last year one potential bidder valued it at $17.5 billion.
At a court hearing today in Wilmington, Delaware, different creditor groups told the judge they still had reservations about the Oncor auction.
“Now is not the ideal time to market Oncor,” said Brett Miller, a lawyer for one of two court-approved creditor committees. “We still have a long way to get a deal done.”
When he said he would allow an auction, Sontchi overruled most creditor objections. Today he repeated his intention to approve the sale rules as long as the company makes the changes he demanded in November. The company has said the latest changes should meet the judge’s requirements.
Sontchi agreed to wait to review the final rules so company lawyers can talk to one creditor group about its concerns.
When the Dallas-based power company filed for bankruptcy in April, it had a plan to restructure about $42 billion in liabilities in part by trading Oncor to a favored group of creditors in exchange for debt reduction. Dissenting creditors succeeded in derailing that part of the proposal.
The company still plans to pursue a complicated reorganization based on avoiding certain tax liabilities, a proposal opposed by some creditor groups.
The case is Energy Future Holdings Corp., 14-bk-10979, U.S. Bankruptcy Court, District of Delaware (Wilmington).