By Sara Randazzo and Tom Corrigan
Energy Future Holdings Corp. heads to bankruptcy court Tuesday
in Wilmington, Del., to defend its right to hang on to exclusive
control of its $42 billion bankruptcy until June 23.
The company originally wanted to ward off competing
reorganization plans until Oct. 29 but chopped four months out of
its exclusive control period after its request for an extension
triggered an open clash among major creditor groups.
Top creditors of Energy Future's largest division, Texas
Competitive Electric, are threatening to tear the big Dallas energy
company in two in a way that could touch off $6 billion in tax
liabilities. Junior creditors of the parent company say the senior
Texas Competitive creditors are bluffing and that only a tax-free
reorganization will pass muster.
Energy Future's bankruptcy proceeding began in April 2014 after
months of negotiations with senior Texas Competitive Electric
creditors, a group that includes Apollo Global Management, Oaktree
Capital Management and other big distressed-debt investors. The
company is still pushing toward the goal of a tax-free division of
its two major collections of businesses.
On Wednesday in Camden, N.J., the Revel Casino Hotel will return
to bankruptcy court to settle a long-simmering dispute with its
power provider, one that has threatened to leave the resort in the
dark.
ACR Energy Partners LLC, the operator of the custom-built power
plant that supplies both electricity and hot water to Revel, has
threatened to cut Revel's power supply, which could leave the
property susceptible to mold if its climate-control systems are
shut down.
The plant is located next to the resort and is Revel's only
source of power. Revel is ACR's only customer, and the two rely on
each other to stay in business.
Revel, which filed its second Chapter 11 case last June, now
provides only a fraction of the roughly $3 million owed to ACR each
month under its existing contract. In court papers, Revel says it
should be responsible only for the value of the services it
receives and not for additional payments related to the
construction of the plant.
ACR said in a statement that the partial payments it receives
from Revel are no longer enough to cover its expenses. A bankruptcy
judge dealt an additional blow to ACR when she approved a $125
million financing package from Wells Fargo, which places the bank's
debt ahead of ACR's claim, ensuring ACR will never be paid in full
for its services.
Revel and ACR are working toward a settlement prior to
Wednesday's hearing, lawyers for both sides say.
Cancer drug maker Dendreon Corp. (DNDNQ) is looking for
competing bidders to challenge a $400 million offer for its assets
from Valeant Pharmaceuticals International Inc. (VRX, VRX.T). If
other potential buyers emerge by Tuesday, the company will hold a
Thursday auction at the New York offices of law firm Skadden, Arps,
Slate, Meagher & Flom LLP.
Valeant originally bid $296 million for Dendreon's assets but
increased the price in the run-up to the auction. The sale includes
Dendreon's flagship product, Provenge.
If a competing offer wins out, Valeant will be in line for a
breakup fee and expense reimbursement. Valeant has offered to hire
Dendreon employees and take over the supply contracts for the
acquired business.
Dendreon filed for Chapter 11 protection in September after
Provenge failed to prove a hit with doctors. Its cost of $93,000
for a standard course of treatment and results that showed only a
four-month improvement in median survival rate made the drug a
tough sell.
-Peg Brickley contributed to this article.
Write to Sara Randazzo at sara.randazzo@wsj.com and Tom Corrigan
at tom.corrigan@wsj.com
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