New York, July 7 (FinanceEnquiry.com) ? Dynegy Inc (NYSE: DYN), an electricity generating company has filed a bankruptcy protection in New York to settle its dues with creditors and merge with Dynegy Holdings, its parent company.
The New York bankruptcy court has already ruled in favor of Dynegy by which creditors will hold 99% of merged entity created by the merger of Dynegy and Dynegy Holdings.
The court through this ruling settled a disagreement that has arisen as a result of Dynegy?s acquisition $1.25 billion worth Coal-power plant owned by Dynegy Holdings.
The disputed parties have sought court?s direction as it claimed that shifting of assets from parent company to a subsidiary wrongfully benefited activist investor Carl Icahn, the Seneca Capital Investments and Franklin Resources Inc?s Franklin Advisers unit at their expense.
The court?s examiner, Susheel Kirpalani, has earlier termed the shifting of assets ?fraudulent transfer? that caused financial loss to Dynegy Holdings last March.
With the latest decision, the court has approved the reorganization plan as per the bankruptcy filing. Dynegy Holdings will now have to get the plan approved from the creditors.
Chapter 11 filing undertaken on Friday by the Dynegy excludes its coal and gas-fired businesses. Dynegy proposed to buy Enron Corp in 2001, however, rolled back their plans as the business and finances of its larger rival deteriorated quickly.
According to papers filed in court, Dynegy posses $11.3 billion worth assets and liabilities of $5.1 billion as of May 31.
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Source: http://www.financeenquiry.com/dynegy-inc-goes-bankrupt-to-merge-with-dynegy-holdings_19980.html/
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