Energy Future Holdings filed with the U.S. Bankruptcy Court a motion to approve a compromise, under Rule 9019, and for entry of an order approving the settlement between the Debtors and Sempra and approving the agreed amendment to the merger agreement.
The motion explains, “[T]he Debtors and Sempra are poised to obtain regulatory and Bankruptcy Court approval of a comprehensive merger transaction that will, at long last, allow the Debtors to emerge from Chapter 11. Pursuant to the Merger Agreement, the Debtors and Sempra agreed that any Q4 2017 Dividend would be shared 75%/25% between the Debtors’ estates and for the benefit of Sempra, respectively. Importantly, however, the Merger Agreement does not explicitly reference the Q3 2017 Dividend….Following entry of the PUCT Order allowing the Modified Debt/ Equity Ratio, in late October 2017, Oncor declared the Q3 2017 Dividend, but provided that such dividend would be paid if additional equity contributions are made to Oncor from its members in the total amount of approximately $250 million on or before the date of the closing of the Merger Agreement, in which case the Debtors expected that Oncor would be likely apply such retained earnings towards the Modified Debt/ Equity Ratio.”
In addition, “Sempra shall pay, or cause to be paid, (a) $27.25 million to EFIH, the EFIH Settlement Payment and (b) $3.75 million to EFH, the EFH Settlement Payment, at closing of the Merger Agreement, subject to certain potential adjustment. EFH will pay Oncor approximately $19 million on account of tax year 2016….Under the Settlement Agreement, Sempra is providing a guaranteed payment of $31 million to the EFH and EFIH estates (subject to potential adjustment in the event Oncor actually pays the Q3 2017 Dividend or Q4 2017 Dividend or OEDH makes any payment with respect to the EFH-OEDH 2017 TSA Claims on or prior to the Merger Closing).”
The Debtors also filed with the Court a motion to shorten and set the response deadline for the above compromise, which will be heard on February 16, 2018, with objections due by February 12, 2018.
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