MINNEAPOLIS, Minn., Nov. 25, 2002 — NRG Energy Inc. said that it intends to continue to conduct business as usual despite the late Friday afternoon filing of an involuntary Chapter 11 petition against the company by five former NRG executives.
NRG also said the filing of the involuntary petition does not put the company into bankruptcy nor is the company subject to restrictions imposed on debtors under the U.S. Bankruptcy Code.
Under provisions of federal law, NRG has the full authority to continue to operate its business as if the involuntary petition had not been filed unless and until a court hearing on the validity of the involuntary petition is resolved adversely to NRG.
NRG has 20 calendar days to respond to the allegations contained in the involuntary petition, during which time it can choose to seek to have the petition dismissed, or converted to a voluntary bankruptcy under Chapter 11. Should NRG seek to have the petition dismissed, the court would then set a hearing to determine the merits of the petition – a process that could take several weeks or more.
NRG would have the opportunity to present evidence and the court would have to judge whether the petition had any merit. NRG is currently considering its options.
In the meantime, NRG’s employees will receive their wages, salaries and benefits as usual, and NRG will continue to purchase goods and services and pay for all purchases on normal business terms. The involuntary petition, filed in the U.S. Bankruptcy Court for the District of Minnesota, was filed against NRG Energy, Inc. and not against any of its subsidiaries, which actually own and operate NRG’s power generating facilities.
During the last few months, NRG has been engaged in negotiations with its bank lenders and bondholders to develop a plan for restructuring the company’s debt. NRG said that it expects those discussions to continue and stressed that none of the bank lenders or bondholders had joined the former NRG executives in signing the involuntary petition.
NRG develops and operates power-generating facilities. Its operations include competitive energy production and cogeneration facilities, thermal energy production and energy resource recovery facilities.
Xcel Energy is a major U.S. electricity and natural gas company with regulated operations in 12 Western and Midwestern states. The company provides a comprehensive portfolio of energy-related products and services to 3.2 million electricity customers and 1.7 million natural gas customers through its regulated operating companies. In terms of customers, it is the fourth-largest combination natural gas and electricity company in the United States. Company headquarters are located in Minneapolis.
Source: NRG Energy, Inc.