Elliott Associates, Elliott International and The Liverpool Limited Partnership (collectively, “Elliott Funds”) filed with the U.S. Bankruptcy Court an objection to NextEra Energy’s motion for payment of an administrative claim in the Energy Future Holdings case.
The objection asserts, “By the Application, NextEra Energy seeks payment of a $275 million termination fee following the regulatory veto over and resulting failure of its transaction. As set forth more fully in The Elliott Funds’ Motion to Reconsider in Part the September 19, 2016 Order Approving the NextEra Termination Fee, payment of the Termination Fee under the circumstances should be revoked or denied, to the extent it was ever approved. Any payment of the Termination Fee would be contrary to the Third Circuit’s mandate. The Application should be denied on other grounds as well.”
In addition, “Upon information and belief, Elliott contends that NextEra breached its obligations to use ‘reasonable best efforts’ to obtain regulatory approval from the PUCT for its transaction by, among other things, (i) failing to appropriately negotiate and engage with the PUCT and the intervenors, including regarding the ‘deal killer’ conditions; and (ii) using rights under a side letter with Oncor in connection with a proposed service territory swap with Sharyland to protect its own prospects with respect to Sharyland. Moreover, there appears to be grounds for disallowing the Termination Fee based on NextEra’s conduct subsequent to the PUCT’s initial announcement that it was unlikely to approve the NextEra Transaction at the March 30, 2017 Open Meeting, including NextEra’s threat to use the Termination Fee to extract $500 million of financial concessions from certain creditors. Finally, the Debtors, the Independent Directors, and their advisors are hopelessly conflicted in addressing the Application and any litigation concerning the NextEra Termination Fee.”
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