Bell Nunnally attorneys Karen L. Hart and Nicole M. Eason authored the Law360 article, “Fraudulent Transfer Is The Bomb! Fallout From In Re Dynegy.” In the piece, Hart and Eason explain how the U.S. Bankruptcy Court Examiner used a non-binding fraudulent transfer finding to resolve the Houston-based Dynegy Inc.’s Chapter 11 bankruptcy reorganization. The Examiner found that power plants held by a Dynegy holding company (Dynegy Holding LLC) had been transferred to Dynegy Inc. in exchange for an illiquid, unsecured, highly unusual financial instrument called an "undertaking.” Essentially, the “sale” to Dynegy of these power plants was, as per the Examiner, no real sale at all. According to the Examiner, the transaction "transferred hundreds of millions of dollars away from Dynegy's creditors in favor of its stockholders." The Examiner’s report and conclusions lead to a successful mediation, which resulted in a confirmable plan for the Dynegy debtors, who emerged intact from bankruptcy in October 2012. Full text of the article can be found here and is available on Law360’s website (subscription required).
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