Bankruptcy court approves Denton County Electric Cooperative reorganization plan

HERNDON, Va., Sept. 13, 2002 — The Honorable D. Michael Lynn of the U.S. Bankruptcy Court for the Northern District of Texas, Fort Worth Division, entered an order on September 11, 2002, confirming the bankruptcy reorganization plan jointly submitted in June 2002 by Denton County Electric Cooperative, Inc., d/b/a CoServ Electric (CoServ) and National Rural Utilities Cooperative Finance Corp. (CFC).

Under the plan, $601 million of CoServ’s debt will be repaid over the next 35 years.

On August 29, 2002, Judge Lynn entered an order confirming the liquidation plan of CoServ Realty Holdings, L.P., also jointly submitted in June 2002 by CoServ and CFC. Under this plan, CoServ’s real estate holdings will be transferred to an entity controlled by CFC in satisfaction of indebtedness of approximately $365 million.

In addition, the confirmation hearing for the liquidation of CoServ’s telecommunications entities is scheduled for September 27. If confirmed, an entity controlled by CFC will acquire all of the telecommunications properties, which CFC intends to sell to others.

“Now that Judge Lynn has approved these plans, CoServ will be able to emerge from bankruptcy, refocus its efforts on its core electric business, and begin repaying its debt to CFC,” said CFC Governor and CEO Sheldon C. Petersen. “The rapid resolution of this situation is very positive for CFC members and investors.”

CFC is a not-for-profit finance cooperative that serves the nation’s more than 1,000 electric cooperatives and their subsidiaries. With more than $20 billion in assets, CFC provides its member-owners with an assured source of low-cost capital and state-of-the-art financial products and services.

Source: National Rural Utilities Cooperative Finance Corporation


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