Energy Future Holdings Corp. is battling some of its former businesses in a tax dispute with Vistra Energy Corp., and hedge fund Elliott Management Corp. is chiming in, Fox Business reported yesterday. Vistra is made up of Energy Future's former power-producing and retailing businesses, which exited from bankruptcy last year as a new company. Still stuck in chapter 11, Energy Future on Tuesday sued Vistra, accusing it of violating an agreement on how to divide the energy giant's tax breaks. Elliott, Energy Future’s largest creditor, filed papers seeking to weigh in on the fight, which focuses on an agreement struck in August 2016, as the former TXU retailing and power-generating businesses, TXU Energy and Luminant, were preparing to exit bankruptcy. Taxes were a driving force in shaping Energy Future's restructuring, which saw the company split in two. Done incorrectly, the breakup of Energy Future could have left behind a multibillion-dollar unpaid tax bill, which would have been a major embarrassment for private-equity owners KKR & Co., TPG Capital and an arm of Goldman Sachs Group Inc. To prevent the tax-liability overhang, Energy Future engaged in extensive talks with the IRS and devised a complex deal structure meant to produce the desired effect, accompanied by a pact to cooperate in filing tax returns. New court papers say Energy Future doesn't believe Vistra is abiding by the tax agreement, and will further violate it Oct. 16, when it files its tax returns.
