Daily News: July 6, 2012

Dynegy Files for Chapter 11, Sets Stage for Dynegy Holdings Merger

Dynegy Inc. filed a voluntary petition to reorganize under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York, Poughkeepsie Division. The Chapter 11 case of Dynegy’s wholly owned subsidiary, Dynegy Holdings, LLC is pending in the same court.

Separately, Dynegy Holdings announced it received approval from the court of its disclosure statement for Dynegy Holdings LLC’s (DH) modified third amended plan of reorganization proposed by DH and Dynegy Inc. as well as the procedures for soliciting formal creditor votes on the amended plan of reorganization. The plan is subject to confirmation by the U.S. Bankruptcy Court and the confirmation hearing is scheduled for September 5, 2012.

Dynegy Inc.’s filing was made to facilitate the implementation of the transactions contemplated under the Amended and Restated Settlement Agreement entered into, by and among Dynegy, Dynegy Holdings, and certain Dynegy Holdings Debtors and the primary creditor constituencies in the Dynegy Holdings Chapter 11 case. Among other things, the settlement, which has already been approved by the court, provides for Dynegy and Dynegy Holdings to merge and for the administrative claim granted to Dynegy in the Dynegy Holdings Chapter 11 case to be transferred out of Dynegy for the benefit of its shareholders. Both of these matters are the subject of a pending motion in Dynegy Holdings’ case.

Subject to obtaining additional relief from the court in Dynegy’s case, the filing will also permit the solicitation of votes on the Companies’ joint Chapter 11 plan to commence. It is contemplated that upon completion of the merger, Dynegy Inc. will be the surviving entity. All assets will then be held under a single holding company, thus eliminating a layer from the corporate structure.

Dynegy subsidiaries that own and operate the company’s coal-fired and gas-fired businesses were separately financed during 2011 and are therefore not included in today’s Chapter 11 filing. They will continue to operate their businesses in the ordinary course. Dynegy has sought customary first-day relief designed to ensure a smooth transition into Chapter 11 administration. Among other things, this relief, if granted by the Bankruptcy Court, will ensure that the company has sufficient cash and liquidity to fund its continuing operations and all administrative obligations incurred during the Chapter 11 process.

Dynegy is represented by White & Case LLP and advised by Lazard Freres & Co. LLC.

Dynegy’s subsidiaries produce and sell electric energy, capacity and ancillary services in key U.S. markets.

Previously on abfjournal.com:

Dynegy Holdings, Four Subsidiaries File for Chapter 11, Tuesday, November 08, 2011