Electric utility Dynegy Inc. (DYN), which is in the process of restructuring its de-consolidated Dynegy Holdings unit, Friday said it has filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code.
According to the company, the bankruptcy protection filing in the United States Bankruptcy Court for the Southern District of New York, Poughkeepsie Division is intended to implement transactions under amended and restated settlement agreement with Dynegy, Dynegy Holdings and certain Dynegy Holdings debtors and primary creditor constituencies in the Dynegy Holdings Chapter 11 case.
The settlement, which has already been approved by the court, provides for Dynegy and Dynegy Holdings to merge and for the administrative claim granted to Dynegy in the Dynegy Holdings Chapter 11 case to be transferred out of Dynegy for the benefit of its shareholders.
Earlier last month, Dynegy Inc got approval from the Bankruptcy Court for its amended and restated settlement agreement that was executed on May 30. Creditors who are parties to the settlement agreement hold over $2.7 billion of claims against Dynegy Holdings.
On Thursday, the Bankruptcy Court approved the disclosure statement for Dynegy Holdings' modified third amended plan of reorganization. The deadline for voting on and for objecting to the modified third amended plan of reorganization is August 24. The plan is subject to confirmation by the U.S. Bankruptcy Court and the confirmation hearing is scheduled for September 5.
It was in last November that Dynegy Holdings along with its four wholly owned subsidiaries, filed for voluntary bankruptcy protection. The subsidiaries include Dynegy Northeast Generation, Inc., Hudson Power, L.L.C., Dynegy Danskammer, L.L.C. (Danskammer) and Dynegy Roseton, L.L.C. In December, Dynegy joined Dynegy Holdings in filing the proposed Plan of Reorganization.
Upon completion of the merger with Dynegy Holdings, Dynegy Inc. will be the surviving entity, with all assets held under a single holding company.
In addition, Dynegy said its subsidiaries that own and operate its coal-fired and gas-fired businesses were separately financed during 2011 and are not included in today's Chapter 11 filing.
Dynegy is represented by White & Case LLP and advised by Lazard Frères & Co. LLC.
DYN closed Thursday's regular trading at $0.59 on the NYSE.
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