Junior creditors of Energy Future Holdings can review company financial records, a judge ruled yesterday, as the bankrupt Texas utility trudges through an increasingly complicated bankruptcy, Reuters reported yesterday. Granting a request from second-lien bondholders of Energy Future's TCEH power generation unit, bankruptcy Judge Christopher Sontchi endorsed broad discovery procedures at a hearing in his Delaware courtroom, mostly centered on transactions that occurred before Energy Future's chapter 11 filing in April. The move could herald future litigation in what is already a tangled case. Wilmington Savings Fund Society, the trustee for the second-lien group, wants to study Energy Future's collapse with an eye toward determining if certain transactions can be unwound due to fraud or other improprieties. Energy Future, the former TXU Corp, is the product of a record-breaking $45 billion buyout in 2007 by KKR & Co., TPG Capital Management and the private equity arm of Goldman Sachs. It filed for chapter 11 after years of lower-than-forecast power prices to restructure more than $40 billion in debt.
