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Energy Future Holdings Corp., Texas' biggest power company, won bankruptcy court approval on Friday for a plan that will allow the bulk of its operations to exit chapter 11 after two years of battling creditors, Reuters reported. "I am going to overrule all of the remaining objections,” said Bankruptcy Judge Christopher Sontchi. Dallas-based Energy Future filed for bankruptcy in April 2014 when weak electricity prices left it unable to service $42 billion in debt, mostly related to the company's creation through a 2007 leveraged buyout. The reorganized company will own TXU Energy, the state's largest retail electric utility, and Luminant, Texas' largest power plant operator and largest coal miner. The spinoff of the two divisions into the new company avoids a tax liability that had worried creditors. The potential for a "massive" tax liability was the "elephant in the room," Judge Sontchi said on Friday, adding that he believed the plan "was the best possible deal" to push the company out of bankruptcy.

Bankruptcy Judge A. Benjamin Goldgar said yesterday that Caesars Entertainment Corp. is unlikely to get protection from bondholder lawsuits that would last as long as its insolvent operating company is in bankruptcy, Bloomberg News reported. Judge Goldgar today will decide whether to extend a halt on lawsuits in New York and Delaware, and if so, for how long. Goldgar made it clear yesterday that he would not give Caesars a lawsuit shield that lasts until after Caesars Entertainment Operating Co. wins approval of its reorganization plan, which can’t happen until next year at the earliest. “I’ve said that isn’t going to happen,” Goldgar said yesterday near the end of a three-day hearing on possibly halting bondholder lawsuits that could impose $11.4 billion in judgments on the parent company. The lawsuits are the biggest obstacle left to getting Caesars’ main operating unit out of bankruptcy. Bondholders want to use the suits, which a court examiner found have a good chance of succeeding, to boost their recoveries to more than the 34 percent offered by CEOC.

Energy Future Holdings Corp., Texas' biggest power company, yesterday urged a U.S. bankruptcy court to allow the bulk of its operations to exit chapter 11, Reuters reported. Energy Future filed for chapter 11 in April 2014 with $42 billion in debt, the largest bankruptcy since General Motors Corp's in 2009. Much of the debt had been taken on in 2007 when the Dallas-based company was formed through the $45 billion leveraged buyout of TXU Corp, led by KKR & Co., TPG Capital Management and the private equity arm of Goldman Sachs. Energy Future and its creditors have been engaged in expensive legal fights over a wide range of disputes. Other reorganization plans had failed to get support. Under the latest plan, the company would be renamed TCEH and own TXU Energy, the state's largest retail electric utility, and Luminant, Texas's largest power plant operator and largest coal miner. Leading the fight against the proposal are holders of about $650 million of notes issued by Energy Future. They argue that the plan would not fairly compensate creditors for tax benefits and back office operations that would be transferred to the new company. The noteholders estimated that the transfers would add more than $1 billion to the TCEH operations.

Houston-based Sabine Oil & Gas Corp. emerged from bankruptcy yesterday after more than a year after it filed, the Houston Business Journal reported yesterday. The exploration and production company also closed on its new senior secured credit facility, which has an initial borrowing base of $150 million, and on its new $150 million second lien term loan. Sabine’s chapter 11 reorganization included a debt-for-debt exchange, a debt-to-equity conversion and the issuance of warrants to purchase stock in Sabine’s new parent holding company. According to Sabine’s July 2015 chapter 11 filing with U.S. Bankruptcy Court for the Southern District of New York, the company had $2.48 billion in assets and nearly $2.91 billion in liabilities as of May 31, 2015. Read more.

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Dex Media, Inc., one of the largest national providers of local marketing solutions for local businesses, announced that it completed its financial restructuring and emerged from chapter 11 when its confirmed reorganization plan went into effect on July 29, the ABL Advisor reported yesterday. Dex Media was able to shed approximately $1.8 billion of debt during the restructuring. Dex Media is now a privately-owned company as previous shares of common stock have been canceled with no distribution to the holders of those shares. Per the reorganization plan, Dex Media’s previous Board of Directors has disbanded and its new six-member Board of Directors includes representatives from the holders of the company’s newly issued common stock.

Seventy Seven Energy Inc. has completed its prepackaged restructuring and emerged from chapter 11 protection, the Tulsa (Okla.) World reported yesterday. The Oklahoma City-based oil-field services company said that it converted $1.1 billion in debt into equity. The bankruptcy process was completed with no disruption to employees, customers, suppliers or operations, the company said. Seventy Seven filed for bankruptcy protection on May 8 with $1.73 billion in debt and $1.78 billion in assets, according to bankruptcy filings. Under terms of the prepackaged reorganization plan, Seventy Seven's previous common shares were canceled. Read more. 

Get a better understanding of what happens when an oil, gas or other natural resources company goes bankrupt. Order your copy of ABI's revised and expanded When Gushers Go Dry: The Essentials of Oil & Gas Bankruptcy, Second Edition.