Efforts by creditors of Energy Future Holdings Corp. to reach a wide-ranging deal to address the Texas power company's massive debt load suffered a setback earlier this week when separate groups of lenders and bondholders gave a tepid response to a proposal from another large creditor, the giant mutual-fund firm Fidelity Investments, the Wall Street Journal reported today. Fidelity holds debt at many of Energy Future's subsidiaries and on Monday presented a plan for reworking the company's finances at the midtown Manhattan offices of its lawyers at Fried, Frank, Harris, Shriver & Jacobson LLP, in an effort to bridge disagreements among creditors so that the company can pursue an organized bankruptcy filing before month's end. Fidelity proposed senior lenders owed more than $20 billion at Texas Competitive Electric Holdings, an unregulated company subsidiary that sells power in a competitive wholesale market, forgive debt for a roughly 94 percent ownership stake in the parent company, the people said. Energy Future's private-equity owners would retain a roughly 2 percent stake, while unsecured bondholders at the parent company would get about 4 percent, under the proposal. Bondholders owed $1.5 billion at subsidiary Energy Future Intermediate Holding Co. would receive a so-called tracking stock at the parent company that would rise or fall based on the performance of Oncor, the regulated business that delivers electricity to consumers.
