Bankruptcy Court Confirms EFH Chapter 11 Plan for NextEra Energy's US$18.7 Billion Acquisition of Oncor

Chadbourne & Parke LLP is advising NextEra Energy, one of the largest electric power companies in North America, in its planned acquisition of Energy Future Holdings (EFH) and EFH’s stake in Oncor Electric Delivery Company (Oncor) in a deal worth US$18.7 billion.  On February 17, 2017 the US Bankruptcy Court for the District of Delaware confirmed EFH’s Chapter 11 plan of reorganization – setting the stage for the company to exit bankruptcy and be acquired by NextEra.  

In this transaction, which was first announced on July 29, 2016, NextEra will acquire 100 percent of the equity of reorganized EFH, including EFH’s approximately 80 percent indirect interest in Oncor, a transmission and distribution utility company that provides power to more than 10 million consumers in northeast and west Texas. EFH, an electric utility company headquartered in Dallas, filed for bankruptcy protection in April 2014 after being saddled by debt in the largest leveraged buyout in US history. As part of the transaction, NextEra will pay US$9.8 billion primarily for the repayment of debt of EFH and its subsidiaries to enable EFH to exit Chapter 11.

After his bench ruling, Judge Sontchi, who is overseeing the bankruptcy, called the case the “privilege of my professional career,” and a “watershed moment” for one of the largest Chapter 11 proceedings in US history.

The acquisition requires approval from the Public Utility Commission of Texas, the Federal Energy Regulatory Commission, as well as from competition regulators.

Partner Howard Seife, chair of the firm’s Bankruptcy and Financial Restructuring Group, led the team from Chadbourne, which included partners William Greason, William Cavanagh, Charles Hord, Robin Ball, Andrew Rosenblatt, Christy Rivera, Marc Ashley and associates Eric Daucher and James Salwen. 

Valuable assistance was also provided by partners Richard Leder and Marjorie Glover, counsel Joe Giannini, senior counsel Carey Child, associates Robert Kirby, Jamie Copeland, Patrick Dorime, Philip DiMola, Ross Shepard and Jacob Laksin and case manager David Bava.

The transaction, which has been approved by the boards of directors of both NextEra Energy and EFH, is expected to be completed in the second quarter of 2017. Chadbourne previously represented NextEra in connection with the sale of its equity interests in White Pine Hydro Investments, which indirectly owned 351 MW of hydro generation-related assets in Maine and New Hampshire.

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