Faced with an apparently unsuccessful deal to reorganize electricity transmission unit Oncor, Energy Future Holdings Corp. may now be staring at a lengthy and expensive bankruptcy fight, according to Sam Stricklin of Dallas’ Gruber Elrod Johansen Hail Shank.
If this transaction is really dead, the bankruptcy case could drag on for a year or more and accumulate gigantic amounts of professional fees,” Mr. Stricklin told the national legal news service Law360. According to the article, professional fees in the EFH case already have reached $300 million, not counting the month-long trial that resulted in EFH’s Chapter 11 plan confirmation. Late last week EFH told the Delaware bankruptcy court that the deal at the heart of its Chapter 11 plan could not be concluded due to conditions imposed by Texas regulators. The state’s Public Utility Commission balked at the tax savings from the deal structure not being shared with ratepayers. But Mr. Stricklin says those costs may ultimately wind up being passed onto consumers. “I applaud the commission’s desire to share some of those tax savings, but they may be cutting off their nose to spite their face, he says.