Energy Future Holdings (EFH), f/k/a TXU Corp., an energy company centered in Texas, was taken private in 2007 in the largest leveraged buyout transaction that has ever taken place. The deal was largely predicated on an anticipated rise in natural gas prices; when prices instead plummeted the company, which had borrowed nearly $40 billion, was left with a massively unbalanced capital structure. The chapter 11 cases of EFH and its subsidiaries commenced earlier this year have been proportionately contentious and complex. (Kelley Drye & Warren LLP represents a creditor of certain EFH subsidiaries, but has taken no part in the matters discussed here).
EFH conducts business through two separate holding companies. Through its subsidiary Energy Future Intermediate Holding Company LLC (EFIH), it owns an 80% interest in Oncor, a regulated electricity transmission and distribution company. Through its indirect subsidiary Texas Competitive Electric Holdings Company LLC (TCEH), it engages in competitive energy market activities, including electricity generation, wholesale and retail electricity sales, and commodity trading.