Energy Future Holdings Corp. took a major step forward Thursday in its drive to exit bankruptcy, when mutual fund company Fidelity Management & Research agreed to back the Dallas energy company’s chapter 11 plan, the Wall Street Journal reported today. A major holder of Energy Future debt, Fidelity will join the group attempting to buy Energy Future’s Oncor electricity transmissions business, Thomas Lauria, lawyer for advocates of the plan said at a hearing in the U.S. Bankruptcy Court in Wilmington, Del. The sale of Oncor is the centerpiece of Energy Future’s restructuring strategy. Money from the Oncor deal will be used to pay off some creditors. The opportunity to invest in a cash-producing, stable element of the Texas power infrastructure in a deal led by Hunt Consolidated Inc. has appeased other creditors. As described by Lauria, Fidelity is getting a little bit of both: cash from the buyout and a chance to invest in Oncor. The about-face by Fidelity, a former critic of Energy Future’s chapter 11 plan, could speed the end of a complicated and expensive bankruptcy proceeding.
