TXU Energy says customers largely unaffected by bankruptcy court notice
05/20/2014 6:10 PM
05/21/2014 8:33 AM
More than a million consumers who use TXU Energy for their home electricity service are getting an odd notice in the mail concerning TXU’s corporate parent, Energy Future Holdings, which filed for Chapter 11 bankruptcy last month.
The notice, which doesn’t mention TXU Energy, talks about filing “proofs of claim” in the Energy Future Holdings case. But as far as residential customers go, it’s largely “for informational purposes,” TXU Energy spokesman Juan Elizondo said in an email Tuesday.
“In a nutshell, there is absolutely no problem,” Elizondo said. “Business continues as usual and we are honoring all customer contracts and commitments.”
In a follow-up statement, the company said the bankruptcy court allowed it to continue the terms of any obligation to a customer “in the ordinary course of business,” such as a deposit. In the unusual circumstance of a dispute or claim that preceded the bankruptcy filing on April 29, however, a customer would need to file a written proof of claim by Oct. 27.
Elizondo said the electricity retailer’s customers may receive other notices during the Chapter 11 process depending on their circumstance.
TXU Energy is the largest electricity retailer in Texas, with about 1.7 million residential, commercial and industrial customers. It is a wholly owned subsidiary of Dallas-based EFH, which was created after the 2007 buyout of TXU Corp.
Jimmie Weaver of White Settlement was among the TXU Energy customers who got the notice in his mailbox Monday. He said he had to go online to look up EFH before he made the connection to TXU Energy, which he has used for years.
Weaver was confused by the beginning of the notice, which says the recipient got the mailing because “you are (a) a large commercial or industrial customer” of an EFH company. But the paragraph goes on to say that others receiving the notice could be “a residential or small business customer of the Debtors that is subject to an agreement for the sale of electricity.”
Elizondo said TXU Energy expects a lot of inquiries about the notice and has “made accommodations for those calls.”
The notice comes from a company called EPIQ Bankruptcy Services, which specializes in managing legal paperwork and is also running the website where court filings in the EFH bankruptcy are posted.
In a related development Tuesday, EFH said it will file a detailed description by June 13 of how it hopes to restructure $40 billion in debt in less than a year. The court must approve the disclosure before creditors can begin voting on the plan.
Lower-ranking creditors oppose EFH’s 11-month timetable, saying the company is trying to ram a plan through U.S. Bankruptcy Court in Wilmington, Del. Those creditors are trying to move the case closer to Texas.
EFH listed $49.7 billion in liabilities. It seeks approval of a plan that would hand control of its deregulated power-producing unit to senior lenders and give the unit that owns Texas’ biggest electricity transmission company to a different group of creditors. Some lower-ranking creditors oppose the proposal.
This report includes material from Bloomberg News.
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