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Energy Future Holdings Opinion Issued

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The U.S. Bankruptcy Court issued an opinion related to Delaware Trust Company’s motion to partially vacate judgment of the Court’s previous opinion ruling that Plan distributions and adequate protection payments distributed per the cash collateral order would be allocated between the first lien creditors on a pro rata basis (based on amounts owed as of the petition date).

The opinion notes, “To date, the District Court has not yet ruled on the merits of the appeal. At the time of the Bankruptcy Court Opinion the First Plan was confirmed but had not yet gone effective. Shortly after the Court issued its Bankruptcy Court Opinion, certain conditions precedent to consummation of the First Plan were not expected to be satisfied, and thus, the First Plan became null and void. Thereafter, the Debtors filed a new plan (D.I. 8355) (as amended, the ‘New Plan’), which was later confirmed and consummated (see D.I. 9421 and 9742).”

Court-filed documents continue, “Although the First Plan and the New Plan contain similar provisions, the two plans are wholly separate and distinct. Thus, the Bankruptcy Court Opinion is premised on a voided plan and yet an appeal to the Bankruptcy Court Opinion and related order remains pending…..In the case sub judice, as the Bankruptcy Court Opinion was premised on the provisions of the First Plan, which is now null and void, and as the terms of the New Plan are different, the Court finds that the intercreditor dispute would need to be examined under the provisions of the New Plan. Thus, the Court, pursuant to Rule 8008(a)(3), finds that the Motion raises substantial issues and suggests that the District Court remand the case to the Bankruptcy Court for further proceedings while retaining jurisdiction (unless the District Court expressly dismisses the appeal).”

Read more EFH bankruptcy news.

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