Latest News 2012 October Dynegy Emerges from Bankruptcy Protection

Dynegy Emerges from Bankruptcy Protection

Dynegy is an electric power company that recently fell on hard times. As a result, the employees determined that they needed to file from Chapter 11 bankruptcy protection in order to dismiss some debts and repay others. Now, the company has finally emerged from their bankrupt state and will be starting afresh and boosting their business. The company is based in Houston, Texas and generates and sells electricity in wholesale power markets. Through the Chapter 11 bankruptcy and debt reorganization, they were able to eliminate a whopping $4 billion in debt. They hope that they will be able to start trading shares this week under the symbol DYN.

The company filed for bankruptcy back in July. They say that they were caught in a tough place after the price of electricity fell significantly. After taking out multiple loans to stay afloat, Dynegy became overwhelmed with over $5 billion in debt. One of their subsidiaries already filed for bankruptcy the previous November. This is the Dynegy Holdings, which was combined with Dynegy Inc. back in September of 2011 in attempt to consolidate and lower costs.

Dynegy then embarked on a restructuring plan that has helped them to get out from under bankruptcy. They will give unsecured lenders a 99 percent stake in the company and $200 million in cash in exchange for eliminating the mounting debts from the company. All shareholders now have a 1 percent in the company and 5-year warrants to buy up 13.5 percent of Dynegy’s common stock. The company, which owns and operates coal and gas-fired power plants in a variety of states, will continue to operate as normal from here on out. Dynegy doesn’t serve retail customers and their emergence from bankruptcy won’t affect wholesale or retail electric rates. If you have been in a tight spot financially like Dynergy, then bankruptcy might be the best way to clear debt and start afresh. Talk to a bankruptcy attorney near you today to determine whether or not this is the best option for you!

Categories: Chapter 11 Bankruptcy