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.

Bankruptcy Law Insights
(posted 6 days 7 hours ago)

A recap of the informed opinions (and the discussions they generated) on BankThink this week.

BankThink
(posted 6 days 7 hours ago)

Modern Vice’s boots are made for walking. Come next week, they’ll be walking to the bankruptcy auction block.
The Manhattan-based shoemaker’s assets are up for sale as part of owner Adoni Group’s Chapter 11 case, court papers show. That includes the brand’s intellectual property, inventory, social media sites, equipment and lease to its Garment District factory.
The maker of rocker-inspired boots (styles are named Jett, Debbie and Bowie) for women and men’s velvet loafers has drawn attention for its styles and efforts to bring shoe-making back to the U.S. from the likes of BET, Elle, Inc. and MTV.
Standing ready to bid on the assets is a company tied to Jordan Adoni, one of the brothers who are the creative force behind Modern Vice. He’s offering $180,000, plus rent, which bankruptcy lawyers are looking to put to the test at a Monday auction.

WSJ.com: Bankruptcy Beat
(posted 6 days 7 hours ago)

A series of settlements to benefit victims of Bernard Madoff’s massive Ponzi scheme will go before a bankruptcy judge Wednesday in Manhattan for final approval.
The settlements include a $95 million deal struck with Senator Fund SPC, an investment fund that parked all of its money with Mr. Madoff, and a $497 million deal to collect money from Herald Fund SPC and Primeo Fund.
Irving Picard, the official tasked with paying back Mr. Madoff’s victims, has to date collected or reached deals to collect approximately $10.5 billion of the $17.3 billion in principal that investors lost upon the collapse of the Ponzi scheme. Of the recovered funds, nearly $6 billion has been returned to investors.
The Senator agreement represents 100% of the principal Senator withdrew from Mr. Madoff’s investment firm. Because Senator put in more money than it took out, the fund will receive a $238.75 million claim against Mr. Madoff’s firm. The first $95 million it is in line to receive as a creditor will go toward paying the amount due under the settlement.
Herald Fund, meanwhile, will receive a $1.6 billion claim against Mr. Madoff’s investment firm as part of its deal that will be paid back in the same fashion.

WSJ.com: Bankruptcy Beat
(posted 6 days 8 hours ago)

As requested by the D.C. Circuit Court of Appeals on the conflict minerals case, the SEC has filed a brief addressing the three questions that the Court asked, which we previously discussed here.

(posted 6 days 8 hours ago)
Reuters

Former MF Global customers, as well as the administrator in charge of the defunct brokerage, are fighting a bid by Jon S. Corzine and other former MF Global executives to tap $7.5 million of their errors-and-omission insurance policy to cover their legal-defense costs, Daily Bankruptcy Review reports in The Wall Street Journal.
(Daily Bankruptcy Review is a daily newsletter with comprehensive coverage and analysis of emerging and in-progress insolvencies and turnarounds. For a two-week trial, visit our homepage, scroll to the bottom and click “try for free.”)
Detroit’s final legal bill for its bankruptcy is likely to wind up around $150 million, WSJ reports.

WSJ.com: Bankruptcy Beat
(posted 6 days 8 hours ago)

Online Investment Platforms: Nuts and Bolts, Fees and Functions… Learn to navigate online investment platforms in Episode 14 of Accredited Investor Markets Radio. This week host Chris Cahill speaks with Heather Lopes, Co-Founder and CSO of EarlyShares.com, who gives us all the details like how Accredited Investors can differentiate between online platforms, how they work and how a platform can help mitigate fraud risk.
 
You can find out more about EarlyShares and Heather Lopes here.
 
You can also find them here:
Twitter (Heather Lopes): @earlysharesCSO
Twitter (EarlyShares): @earlyshares
LinkedIn: Heather Lopes

(posted 6 days 9 hours ago)

The financial system will be safer if accounting standards force banks to incorporate risk into the way they value and report cash and cash equivalents.

BankThink
(posted 6 days 9 hours ago)

In the first part of our two-part series on In re Suntech, we discussed the bankruptcy court’s ruling that Suntech was eligible to be a debtor under the Bankruptcy Code and that venue was proper in the Southern District of New York because of a bank account established in New York on the eve of the chapter 15 filing. We noted the implications of the decision for bankruptcy professionals handling cross-border cases, and that, among other things, the court’s interpretation of section 109(a) of the Bankruptcy Code (which sets forth the standard for a debtor’s eligibility) offers a more “open border” policy for foreign companies wishing to commence a chapter 15 case, and arguably a chapter 11 case, in the United States. In today’s post, we discuss the bankruptcy court’s center of main interests (COMI) analysis in addressing Solyndra’s argument that the foreign administrators had manipulated COMI to the Cayman Islands in bad faith.

(posted 6 days 9 hours ago)

Receiving Wide Coverage ...

Conflict of Interest Strikes Again: Toys tend to make children get greedy, and they appear to produce a similar effect on investment banks. Ten firms were fined $43.5 million Thursday over charges they offered up flattering research analysis in an effort to score a piece of the Toys "R" Us initial public offering. Citigroup, JPMorgan, Wells Fargo and Goldman Sachs are among the banks cited by the Financial Industry Regulatory Authority. Wall...

BankThink
(posted 6 days 10 hours ago)