Monday, 06 February 2023

Bankruptcy judge approves Calpine reorganization plan

LAKE COUNTY – Calpine Corp. has received the go ahead from a federal bankruptcy court judge to move forward with its reorganization plan, which includes emergence from bankruptcy early next year.


On Dec. 17 Judge Burton R. Lifland of the United States Bankruptcy Court for the Southern District of New York issued a decision confirming Calpine's Sixth Amended Joint Plan of Reorganization, company officials reported.


Lifland ruled that the company had met all of its statutory requirements necessary to confirm its plan, according to a statement from the company.


The ruling came less than a week after Calpine reported that 91 percent of its creditors voted in favor of the reorganization plan.


The federal bankruptcy court decision puts Calpine on track to emerging from Chapter 11 bankruptcy early next year, prior to Feb. 7, 2008, the company reported.


"We continue to be very proud of what we have been able to accomplish as we work to emerge as a financially stable, stand-alone company with an improved competitive position in the energy industry,” Calpine Chief Executive Officer Robert P. May said in a written statement.


Gregory L. Moody, Calpine's general counsel and chief restructuring officer, said in a written statement that the company's reorganization has been the largest and most complex conducted under the new bankruptcy laws.


Calpine filed the reorganization plan in federal court in June, a year and a half after it declared Chapter 11 bankruptcy in December 2005, as Lake County News has reported.


In November, the Associated Press reported that Calpine plans to give up attempts to recover $2 billion in “preferential payments” that it made to businesses 90 days before its bankruptcy filing. Calpine, as a business in bankruptcy, could have filed to recover those funds under bankruptcy law.


Mel Scott, a Calpine spokesman, told Lake County News that Calpine's next step is to emerge from bankruptcy before the first week of January.


After the emergence, Scott said Calpine plans to begin trading on the New York Stock Exchange under the ticker symbol CPN, replacing the current symbol, CPNLQ.


The company, founded in 1984, owns 19 of 21 geothermal units in the 40-square-mile Geysers steamfield network, which is the world's largest geothermal facility, Dennis Gilles, Calpine's senior vice president for geothermal power operations, told Lake County News in an interview earlier this year.


In May Calpine announced that it planned to invest $200 million in its operation at The Geysers. That effort seeks to expand steam production and identify new sources of geothermal power, and replace geothermal turbines with more efficient models.


The Geysers plants generate 725 kilowatts of power, enough to supply 725,000 households, according to Giles, and employ 350 of the company's 2,300 workers.


Calpine reports that, companywide, it's capable of delivering nearly 24,000 megawatts of electricity in 18 states.


Since declaring bankruptcy, Calpine has sold off some of its holdings, but has maintained that its Lake County operations are core to its future plans and that The Geysers geothermal plants would not be sold.


On Dec. 17, following the court's ruling on the reorganization plan, May credited Calpine's employees for their hard work and dedication “during these uncertain and challenging times.”


“Calpine would not have been able to accomplish all that we have during our restructuring without the outstanding effort and commitment of our employees,” May said.


During the spring of 2006 court documents showed that Calpine cut its workforce by 975, but officials have told Lake County News they have to plans for further reductions.


The company still hasn't determined exactly how its emergence will happen, said Scott. The company continues to negotiate with all of its creditors, he added.


On Dec. 21 Calpine announced that it would issue warrants to purchase 50 million shares of its new common stock, or about 10 percent of the common stock to be issued pursuant to its reorganization plan, to holders of its currently outstanding common stock. Each warrant will represent the right to purchase a single share of Calpine's new common stock.


Calpine is also still figuring out how much its new stock will be worth based on a complex formula, said Scott.


On a possible stock value, Scott said, “It's a little early for us to try to provide that.”


However, a scenario in court documents suggests that if the company ultimately issues 500 million shares, stocks could be valued at $23.88 per share. Calpine's current stock is trading at 26 cents per share.


“We're ready to move forward at this point,” said Scott.


For more information or to see Calpine's court documents, visit www.calpine.com or www.kccllc.net/calpine/.


E-mail Elizabeth Larson at This email address is being protected from spambots. You need JavaScript enabled to view it..


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