%1

Brilliant Energy LLC filed for bankruptcy in the Southern District of Texas, adding to a growing list of companies that have stumbled after power outages caused by a winter freeze in February, Bloomberg News reported. The electricity provider has estimated liabilities of $50 million to $100 million compared with assets of $10 million to $50 million, according to its chapter 7 filing yesterday. At their peak, the unprecedented outages left four million homes and businesses without heat, light and in some cases water as a rare and powerful winter storm gripped the region, causing as much as $129 billion in economic losses. Dozens of people died in the cold. Brilliant Energy is at least the fourth firm to seek bankruptcy protection in the wake of the Texas freeze, underscoring the crushing financial pressure the outages have put on power companies in the state. The market faces a more-than $3 billion shortfall as more than a dozen companies can’t pay their bills.

Griddy Energy LLC has one final deal for Texans before the power seller shuts down for good: if its 29,000 former customers agree not to sue, the company will cancel electric bills that were about 300 times normal amid last month’s winter storm, Bloomberg News reported. On its first day in bankruptcy court, Griddy lawyers outlined a plan to liquidate, settle with customers and, possibly, arrange lawsuits against those that the company blames for its collapse. U.S. Bankruptcy Judge Marvin Isgur called Griddy’s bankruptcy proposal “unique and really unprecedented.” Isgur, who has overseen some of the biggest corporate restructurings filed in recent years, pushed Griddy to ensure that customers understand how the bankruptcy case will affect their huge electric bills after first criticizing Griddy’s attempt to pay one of its lenders as the case goes forward. Customers face an average bill of about $1,100 because of the winter storm that sent power prices surging, Judge Isgur said. If Griddy wants to cancel those charges in exchange for customers dropping potential lawsuits, the company must clearly let people know that, Judge Isgur said. Griddy filed for bankruptcy on Monday, blaming its woes on the Electric Reliability Council of Texas, which runs the state’s power grid. During the storm, Ercot, as it is known, pushed up wholesale power prices dramatically under rules Texas lawmakers have adopted that deregulated much of the state’s electric industry over the course of several decades. Griddy was barred from the state’s power markets in late February after failing to make a payment.

Creditors of cryptocurrency platform Cred Inc. called for the arrest of a former executive identified in court papers as a U.K. fugitive, arguing he should do jail time unless he returns the bitcoin and other assets he allegedly took from the bankrupt company, WSJ Pro Bankruptcy reported. A committee of unsecured creditors on Monday petitioned the U.S. Bankruptcy Court in Wilmington, Del. to hold James Alexander, Cred’s former chief capital officer, in civil contempt for violating an earlier bankruptcy court directive and to issue a warrant for his arrest. Cred and its unsecured creditors, which include cryptocurrency holders, have alleged during the bankruptcy that Mr. Alexander misappropriated at least 225 bitcoin, now valued at roughly $12 million, while he worked at the company. Alexander has returned roughly 50 bitcoin and $2.8 million in proceeds from liquidated bitcoin, according to the findings of an independent, court-appointed examiner last week.

The family that owns OxyContin maker Purdue Pharma LP agreed to pay roughly $4.28 billion — a larger sum than previously promised — to resolve lawsuits accusing it of helping to fuel the opioid epidemic, the Wall Street Journal reported. The payment from members of the Sackler family is part of a larger restructuring plan filed yesterday in U.S. Bankruptcy Court in White Plains, N.Y., that is intended to get Purdue out of chapter 11. The plan is a critical milestone in the Stamford, Conn.-based drugmaker’s bankruptcy and the culmination of months of negotiation between members of the Sackler family and states, personal-injury plaintiffs and other creditors. A group of around half of all U.S. states has repeatedly demanded more money from the Sackler family, a concession included in Monday’s plan. At the time of its September 2019 bankruptcy filing, the family had agreed to pay $3 billion with the promise of up to another $1.5 billion contingent on the sale of its international business. The new offer guarantees $4.28 billion, paid in installments over the next decade. A key piece of the restructuring plan, which includes another $1.5 billion in cash and expected proceeds from OxyContin sales, is ensuring that the money will largely be spent to help abate the nation’s opioid crisis, rather than going into the general coffers of state and local government creditors. Purdue’s chapter 11 plan must be approved by a bankruptcy judge and likely will be challenged in court by individuals who have suffered injuries from opioids and state attorneys general who have not signed onto the deal. A final resolution isn’t expected before the summer. “We’re going to keep fighting for the accountability that families all across this country deserve,” said Massachusetts Attorney General Maura Healey, who, along with 23 other attorneys general, voiced opposition to the plan yesterday and called for greater transparency and more money upfront from the Sacklers.

Texas lawmakers yesterday approved a bill to cut about $5.1 billion in disputed electricity and services fees levied on power marketers during a winter freeze that sent the state’s power market into financial crisis, Reuters reported. The cold snap last month spurred a power crisis that pushed up electricity costs by nearly 10 times the usual to about $47 billion. Those costs led three companies to seek bankruptcy and a sparked a battle between lawmakers and the state’s power regulator over the handling of the crisis. The state’s senate overwhelmingly approved a measure directing the Public Utility Commission chairman and state grid operator Electric Reliability Commission of Texas (ERCOT) to correct 32 hours of emergency prices and rollback service fees. If approved by the state’s house of representatives, it would go to the governor’s desk for his review.

Seadrill plans to lay off 162 workers after the U.K.-based offshore driller couldn’t secure a new contract for one of its drillships, the Houston Chronicle reported. The company’s Houston office informed Mayor Sylvester Turner and the Texas Workforce Commission last month that workers on its West Neptune drillship in the Gulf of Mexico would be laid off in the coming months after the contract ends. Layoffs began this month and will be completed by the end of May, Seadrill said. “The West Neptune will soon complete operations under its current contract and is anticipated to be cold stacked (mothballed),” Seadrill said in a Feb. 8 letter, which was made public Monday. “The inability to secure additional work for the West Neptune in the face of the current market and other conditions is sudden (and) unexpected, and outside of Seadrill’s control.” Oil exploration and production companies have been hammered by the coronavirus-driven oil bust, which has plunged demand for petroleum products such as gasoline and jet fuel. Offshore drillers, in particular, have been hardest hit as crude from deep-water wells is among the most expensive to produce, requiring large upfront capital and a longer return on investment. Seadrill and some of its subsidiaries filed for chapter 11 bankruptcy last month in the Southern District of Texas, its second in four years. The company reported a $4.7 billion loss in 2020, and has $6.2 billion of debt coming due within this year.

The National Rifle Association has agreed to allow the New York Attorney General’s office question a board member about the gun rights organization’s decision to seek chapter 11 protection, Reuters reported. NRA attorney Gregory Garman of Garman Turner Gordon told U.S. Bankruptcy Judge Harlin Hale during a remote hearing yesterday that the organization has agreed to set a date for a deposition of Judge Phillip Journey, an NRA board member who is a Kansas state judge. The agreement came two weeks before a trial over the attorney general’s motion to dismiss the chapter 11 case is scheduled to begin.

Cicis pizza buffet announced that it has successfully emerged from chapter 11 protection, FoxBusiness.com reported. The company has reorganized its corporate team, company operations and financial structure alongside an acquisition by D&G Investors. Cicis confirmed that it had entered into an agreement to sell itself to D&G Investors in early February. The growing popularity of food delivery has been a problem for Cici’s, especially since the COVID-19 pandemic has forced many diners across the country to stay home. The chain has relied primarily on an in-person, all-you-can-eat buffet model, the company said in a court filing, according to the report. Before the COVID-19 pandemic, dine-in customers accounted for 86% of Cici’s business. 

Upstart Texas power retailer Griddy Energy LLC, devoid of customers and facing litigation after charging hefty amounts during the winter freeze that swept the state last month, is planning to file for bankruptcy, the Wall Street Journal reported. Griddy is preparing to wind down its business through a bankruptcy filing that could come within days. Texas regulators have already barred Griddy from the state power market after the company passed steep increases in electricity prices on to customers during last month’s energy crisis. While most consumers in Texas buy electricity at fixed rates from municipal utilities and power retailers, Griddy offered access to variable electricity prices that skyrocketed during the extreme winter weather. When spot prices briefly shot up to $9,000 per megawatt hour during the winter freeze, compared with an average last year of less than $22, Griddy customers complained of receiving exorbitant bills, part of a broader backlash over how regulators and market participants handled the weather emergency.