Texans who use the electricity service of TXU Energy may have received a notice related to the Chapter 11 bankruptcy filing by its parent company. TXU Energy is largest retailer of electricity in the state, with almost 1.7 million customers, including residents, commercial establishments and industries. The spokesperson for TXU Energy stated that there was no problem and the notice was mainly for informational purposes. It was also stated that all commitments and contracts would be honored, and business would continue as usual.
The company stated that the bankruptcy court had allowed the company to continue with the obligations towards its customers. However, if a dispute existed before the bankruptcy filing between the customer and company, the customer would be required to file a written proof of claim.
Many customers of the electricity retailer checked online, after receiving the notices, and later contacted the company. The company expects the customers to make inquiries about the notices and made appropriate arrangements for it.
The company managing the Chapter 11 bankruptcy of the company, Energy Future Holdings, has sent the notices. It has also stated that it will file a detailed description of the debt restructuring plan. Once the court approves the plan, the creditors can vote on it. The parent company has listed liabilities worth almost $50 billion. It plans to give creditors control of the unit that has Texas' largest electricity transmission company and give control of its deregulated power-producing unit to senior lenders.
Similarly, any company that is facing debts and liabilities can file for reorganization under Chapter 11. They may also file for bankruptcy under Chapter 7 of the bankruptcy code. This may enable the business owner to start the business fresh without the financial obligations of the past.
Source: Star Telegram, TXU Energy says customers largely unaffected by bankruptcy court notice," Jim Fuquay, May 21, 2014