PF Archive

Power

01 12 2002

NRG faces Chapter 11 move NRG Energy faces a move by former executives to force it into involuntary Chapter 11 proceedings. Five former executives at NRG have filed a petition with the US Bankruptcy court for the district of Minnesota seeking to have it put into protection. They include its former treasurer, Brian Bird, Leonard Blum, its former CFO, and David Peterson, its former CEO.At issue are severance payments due to the executives after their resignations, thought to total over $20 million. These would be assessed by a bankruptcy judge in the event of a filing. Speculation that a hedge fund is backing the efforts by the five is apparently unfounded.NRG, meanwhile, says that the filing does not affect its operations, and that it will continue work on a restructuring in the interim. A hearing is scheduled for December, during which a judge will accept or dismiss the motion. Tellingly, NRG Energy says that the claim would be assessed in the event of a prepackaged Chapter 11 filing, indicating that this is still a possibility. Choctaw nears market Citigroup is preparing a $430 million structured lease obligation bond (SLOB) issue for Tractebel's Choctaw plant. The issue, which includes in addition $73 million in lease equity, will repay loans from Tractebel to the project, as well as tax-exempt bonds sold to fund construction. The plant originally was funded through a $480 million loan from the then Chase Manhattan Bank.Choctaw had a series of misfortunes in stumbling towards its acceptance by the Tennessee Valley Authority (TVA). The TVA has a thirty-year power purchase agreement (PPA) with the project, which provides for a take-or-pay availability payment as well as...