DALLAS, Dec. 15, 2003 — Texas Commercial Energy (TCE) announced that it has emerged from bankruptcy after the approval of its reorganization plan by all parties.
TCE filed for Chapter 11 bankruptcy protection on March 6, 2003, to protect its customers and gain the time needed to prove that anti-trust behavior and market manipulation significantly contributed to its problems.
According to President Mike Shirley, TCE’s new operating plan strengthens the company’s financial infrastructure, allows the resumption of growth and enables purchasing of power under varying marketplace conditions.
“TCE’s ability to quickly fight our way back from bankruptcy is a clear demonstration of the loyalty of our customers and business colleagues, the determination of our employees and viability of our approach to the electricity business,” said Shirley. He added that TCE is now stronger than ever, having used the reorganization process to reinforce its management team and expand its capitalization.
Shirley noted, “TCE’s successful reorganization is also good for the transitioning Texas energy marketplace because it has proven that delivering superior customer service is a sound and valued business model. By retaining over 90 per cent of our customers and even re-signing some customers who taken away from us, we have been able to sustain our business through the tough work of reorganization.”
One of the key components of the reorganization plan specifically addresses the Electric Reliability Council of Texas (ERCOT), stipulating that TCE’s $15 million debt to ERCOT be amortized over seven years. According to the terms, TCE will pay ERCOT the first $5.6 million while the remaining balance will be placed in escrow awaiting the outcome of pending litigation. This agreement replaces an earlier TCE/ERCOT payment agreement. Since it filed for Chapter 11, TCE has repaid over $17 million to ERCOT.
The reorganization provides all other creditors — including Transmission and Distribution Service Providers (TDSPs), vendors and customers — with a 100 percent payback for negotiated debt. Approximately 75 percent of the debt will be retired through an interest bearing, six-year note and the remaining through profit sharing.
These creditor agreements, coupled with a previously announced $25 million financial and credit facility, constitute the major components of TCE’s reorganization plan and enable TCE to continue its business growth.
“All parties win with TCE’s plan because creditors get 100% of their money back while the company retains its capital and equity as well as the ability to be a strong competitor,” Shirley explained.
Shirley added, “TCE is very appreciative of our employees, our customers and the many people across Texas who have worked tirelessly to help us get back to business and out from under bankruptcy.”
Texas Commercial Energy (TCE) offers award-winning customer service and competitively-priced electricity customers throughout Texas as a leading Retail Electric Provider. TCE was launched in January 2002 in response to deregulation of Texas energy markets. TCE successfully completed the reorganization of its business in December 2003 and has resumed its business expansion. An anti-trust lawsuit filed by TCE in July 2003 continues to move forward. In the lawsuit, TCE accuses a number of energy companies of illegally manipulating Texas’ electricity market and fraudulently inflating prices.