NRG faces Chapter 11 move
NRG Energy faces a move by former executives to force it into
involuntary Chapter 11 proceedings. Five former executives at NRG
have filed a petition with the US Bankruptcy court for the district
of Minnesota seeking to have it put into protection. They include
its former treasurer, Brian Bird, Leonard Blum, its former CFO, and
David Peterson, its former CEO.At issue are severance payments due
to the executives after their resignations, thought to total over
$20 million. These would be assessed by a bankruptcy judge in the
event of a filing. Speculation that a hedge fund is backing the
efforts by the five is apparently unfounded.NRG, meanwhile, says
that the filing does not affect its operations, and that it will
continue work on a restructuring in the interim. A hearing is
scheduled for December, during which a judge will accept or dismiss
the motion. Tellingly, NRG Energy says that the claim would be
assessed in the event of a prepackaged Chapter 11 filing,
indicating that this is still a possibility.
Choctaw nears market
Citigroup is preparing a $430 million structured lease obligation
bond (SLOB) issue for Tractebel's Choctaw plant. The issue, which
includes in addition $73 million in lease equity, will repay loans
from Tractebel to the project, as well as tax-exempt bonds sold to
fund construction. The plant originally was funded through a $480
million loan from the then Chase Manhattan Bank.Choctaw had a
series of misfortunes in stumbling towards its acceptance by the
Tennessee Valley Authority (TVA). The TVA has a thirty-year power
purchase agreement (PPA) with the project, which provides for a
take-or-pay availability payment as well as...
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