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Bankruptcy may be the best thing to happen to Energy Future Holdings’ coal-burning power plants, Bloomberg News reported yesterday. Saddled with $49.7 billion in debt under the stewardship of private-equity firms that included KKR & Co., the Texas electricity generator is poised for a turnaround after emerging from bankruptcy court. Its five coal plants, some at risk for closure, will have more staying power as debt gets slashed, higher natural gas prices boost profits and concerns about grid reliability increase their value. Energy Future filed for bankruptcy on Tuesday after months of negotiations with creditors, owners and management yielded a plan to eliminate $26.1 billion in debt. The Dallas-based company, formerly known as TXU Corp., said that it hopes to exit bankruptcy within a year.

A new report said that the U.S. Treasury’s bailout fund lost $11.2 billion on the rescue of General Motors Co. with the government’s exit of the largest U.S. automaker, Bloomberg News reported today. The total includes $826 million that the Treasury wrote off in March for its remaining claim in old GM, the special inspector general for the Troubled Asset Relief Program said in a report to Congress yesterday. In December, the government had put the loss at about $10.5 billion on its $49.5 billion investment. The Treasury sold its remaining shares in GM in December, signaling the end of Government Motors, as the Detroit-based automaker was derisively labeled by some critics after the U.S. government stepped in with emergency funding in 2008. Bailouts from the George W. Bush and Barack Obama administrations helped GM avoid liquidation and reorganize in a 2009 bankruptcy that has given new life to the company.

Before Energy Future Holdings Corp. can start fighting junior creditors opposed to the company’s more-than $40 billion bankruptcy plan, the judge overseeing the case must pick the battleground, Bloomberg News reported today. Minutes after Energy Future’s chapter 11 filing hit the docket April 29, the junior creditors asked Bankruptcy Judge Christopher Sontchi to move the case from Wilmington, Delaware, one of the busiest bankruptcy venues in the U.S., to a federal courthouse in Dallas, just blocks from company headquarters. A trustee for the lower-ranking creditors wants Judge Sontchi to consider the request at a hearing today, saying that operations would face fewer disruptions if the biggest bankruptcy in the energy industry were handled closer to home. The Dallas-based electricity provider, taken private seven years ago by Henry Kravis and David Bonderman in a record leveraged buyout, filed for bankruptcy this week after negotiating a restructuring deal among creditors, owners and management.

The official winding down Lehman Brothers Holdings Inc.'s brokerage business says he plans to return more than $4 billion in cash to former employees and other creditors, the Wall Street Journal reported today. James W. Giddens, the court-appointed trustee winding down Lehman's broker-dealer, said yesterday that now that he has made whole the failed brokerage's customers, he can turn his full attention to creditors. "With the return of 100 percent of customers' assets, we are now able to lay out a clear plan for winding down the general estate and distributing assets to general creditors as quickly as possible," Giddens said. The distinction between "customer" and "creditor" is a crucial one in the Lehman case. Individual customers of the U.S. brokerage, which was under the purview of the bankruptcy court but not technically in bankruptcy like Lehman's parent, received all $92.3 billion they were owed almost immediately after Lehman's bankruptcy. But general creditors of Lehman's brokerage are set to recover much less.

A group of landlords and food suppliers expecting to go unpaid in Sbarro LLC's chapter 11 case are set to receive $1.25 million under a settlement reached last week with the Sbarro estate, the Wall Street Journal reported today. Cooley LLP attorney Seth Van Aalten, who represents the creditors, said that Sbarro's lenders have further agreed to continue doing business with the company's vendors and landlords once Sbarro emerges from bankruptcy. The lenders also agree not to sue trade creditors to recover money paid to them in the weeks before Sbarro filed for bankruptcy, Van Aalten said. Sbarro entered chapter 11 protection in March with a proposed bankruptcy exit plan backed by 98 percent of its lenders that swaps $140 million in debt for control of the restructured business. Sbarro said in court filings this week that it intends to go through with that plan after a deadline to bid on the company's assets passed with no potential buyers emerging.

Coldwater Creek Inc. moved closer to liquidating its merchandise and closing its stores, after a bankruptcy judge authorized the women's clothing retailer to advance an agreement with two liquidators, Dow Jones Daily Bankruptcy Review reported today. Bankruptcy Judge Brendan Shannon yesterday also authorized Coldwater Creek's proposed auction rules, which will govern the bidding tomorrow should a rival buyer decide to challenge the two liquidators, Hilco Merchant Resources LLC and Gordon Brothers Retail Partners LLC.

Mach Gen LLC emerged from bankruptcy on Monday, two weeks after a judge approved its restructuring proposal, the Wall Street Journal reported today. In a filing with U.S. Bankruptcy Court in Wilmington, Del., the electricity generator said that its plan to slash $1.6 billion debt down to $1 billion became effective on Monday. Mach Gen’s restructuring gives Beal Bank USA and other first-lien lenders owed more than $600 million new debt worth $683 million. Holders of the company’s second-lien debt, who are owed about $1 billion, get 93.5 percent of Mach Gen’s new common stock. The rest of those new shares go to Mach Gen’s existing equity holders. The company’s general unsecured creditors will be paid in full.

LyondellBasell Industries NV said that its first-quarter earnings rose thanks to revenue growth and a credit from a settlement, the Wall Street Journal reported today. The company posted earnings of $945 million, or $1.72 a share, up from $901 million, or $1.55 a share, in the year-ago period. The results included a $52 million credit related to an environmental indemnity settlement, the company said. The chemical-and-polymer producer, which emerged from chapter 11 bankruptcy in 2010, said earlier this month that it would buy back an additional 10 percent of its shares while boosting its quarterly dividend 17 percent.

Dish Network Corp. Chairman Charles Ergen said that LightSquared Inc.’s plan to reorganize will improperly benefit lenders including JPMorgan Chase & Co., which will own all of the wireless-spectrum company’s assets after bankruptcy, Bloomberg News reported today. The plan was devised in talks where LightSquared’s controlling shareholder, Philip Falcone, “made it clear that he was interested in using the plan to enrich himself and equity holders,” Ergen said yesterday in a bankruptcy court filing. Falcone stated that he wanted to protect three parties: his investment firm Harbinger Capital Partners LLC, Fortress Investment Group LLC (FIG) and JPMorgan, Ergen said. SP Special Opportunities Inc., an Ergen fund that invested $1 billion in LightSquared debt, made the allegations following an eight-day trial on whether LightSquared can reorganize under a plan that puts Ergen’s debt behind other lenders and equity holders to be repaid.

U.S. and Canadian customers of failed Tokyo-based bitcoin exchange Mt. Gox have agreed to settle their proposed class action lawsuits that alleged the company defrauded them of hundreds of millions of dollars, Reuters reported today. The class action plaintiffs agreed to support a plan by Sunlot Holdings to buy the shuttered exchange and accept their share of bitcoins still held by Mt. Gox, according to a statement and court filings. Mt. Gox filed for bankruptcy in Japan and the U.S. earlier this year after saying that it lost some 850,000 bitcoins — worth more than $400 million — in a hacking attack. It subsequently said that it found 200,000 bitcoins.