Texas Energy Company Considers Bankruptcy

: Chris Lee Law Firm

  Filed under: News

energy future holdingsOnce dominating the Texas electricity industry, Energy Future Holdings Corp. has been struggling to maintain majority market share in recent years. With continued financial challenges on the rise, the company is considering a prepackaged bankruptcy plan to resolve their debt obligations with creditors.

Big Plans In A  Big Package

Once called TXU Corp. the company was bought out by Energy Future Holdings in 2007 for a record setting $32 billion. With that buyout also came the absorption of $13 billion in debts. The hope was that the new management would boost profitability and narrow margins, but economic downturn forced a reduction in the cost of electricity. Since the buyout in 2007, Energy Future Holdings has lost more than $18 billion and increased their debt burden to $25 billion.

To avoid total collapse the company is planning a prepackaged bankruptcy plan in the coming months. The proposed plan calls for the restructuring of operations, negotiations with creditors and the payment of nearly $270 million of owed interest to bondholders. The Chapter 11 filing will be contingent upon the agreement of creditors, bondholders and the bankruptcy judge in the coming weeks.

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