April 29, 2014

Company says customers, retirees unaffected by bankruptcy

Customers, retirees unaffected by bankruptcy for now.

Here are some answers to common questions about the bankruptcy of Energy Future Holdings.

What happens to me if my electricity contract is with TXU Energy?

TXU Energy, the electricity retailing unit of EFH, said it will honor outstanding customer contracts. “You’ll be able to make any changes permitted under your current plan during reorganization, just as you usually would,” it said in a prepared release.

What about making my payments?

“You can continue to use all of the same payment methods as usual,” the company said. It also said the TXU Energy website and other customer services will remain unchanged.

I’m a retiree. Are my pension and other benefits affected?

EFH said it expects “that retirees will continue receiving their qualified retirement payments during the Chapter 11 process.” It also said it expects to continue medical benefits for qualifying retirees and will hold informational meetings “in the coming weeks.”

Why did EFH file for bankruptcy now?

On May 1, the grace period on a missed debt payment was set to expire. The company also faced a number of big debt payments later this year. “Our existing capital structure has become unsustainable,” said CEO John Young.

How long is the bankruptcy process expected to take?

EFH hopes a reorganization plan can be confirmed in nine months and that it can emerge from bankruptcy in 11 months. Outside analysts suggested that could be optimistic given that several issues, including the tax treatment of the company’s break-up, remain to be resolved.

— Jim Fuquay

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