People in New Hampshire may be interested to learn about how Energy Future Holdings is doing now that the company has been in Chapter 11 bankruptcy for a year. The company, which filed its petition in April 2014, submitted a proposed reorganization plan to the court on April 14, along with a motion for a confirmation meeting. They additionally proposed mediation with creditors regarding an alternative plan.
The reactions from the company’s creditors demonstrate that the company has not made much progress in the past year. Several are arguing against scheduling a confirmation meeting at this stage, indicating that the company does not have enough of its creditors on board with its proposed plan. Other are objecting to the company’s proposed mediation.
Ongoing disputes include the company’s reorganization tax structure, valuation, how they are proposing to divide value between the creditors, an allegedly fraudulent conveyance that occurred in 2007 and intra-company claims. The next 8 to 10 months may be crucial for Energy Future Holdings, as their ability to control the reorganization plan process will expire at the end of that time period. After that, the creditors will be able to submit their own reorganization plans if the company cannot get its own approved.
Chapter 11 bankruptcy can be extremely complicated. When a company wants to restructure its debts, their plan to do so must be approved, and the creditors have the right to object. Most companies that need Chapter 11 bankruptcy relief may benefit by seeking the help of a bankruptcy attorney who has experience with business cases. An attorney may be better equipped to determine an appropriate reorganization plan, and they may be able to negotiate on their client’s behalf with any creditors who are disputing the plan.