Privately-held La Paloma Generating Company and two affiliated Debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the District of Delaware, lead case number 16-12700. The Company, which owns a natural gas-fired, combined cycle electric generating facility, is represented by Mark D. Collins and Jason M. Madron of Richards, Layton & Finger.
According to documents filed with the Court, “The Debtors’ bankruptcy filings are the result of a confluence of adverse market developments, a challenged regulatory environment, mounting compliance obligations under California’s “cap and trade” scheme, and substantial debt service requirements. Slower than expected growth in demand for electric energy, changes in commodity markets, and the build out of renewable generation resources in the California market have compressed the Facility’s generation output and reduced the margin between the market price for electric energy and the market price for natural gas fuel consumed in generating such energy (this margin often is referred to as a “spark spread”).”
La Paloma Generating Company’s Chapter 11 petition indicates total assets of $100 to 500 million. Read more bankruptcy news.
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