Next Step in TXU Bankruptcy Is Up to the Courts and Regulators


The long, sad saga of TXU may finally be heading toward a conclusion. The power producer NextEra Energy is buying the bankrupt company’s 80 percent stake in the power transmission group Oncor Electric Delivery, valued at $18.4 billion.

The $45 billion leveraged buyout of the TXU Corporation, now called Energy Future Holdings, ran into trouble soon after its 2007 completion. Most creditors will have to be satisfied with a slice of the former TXU’s other assets.
The deal, the largest-ever leveraged buyout, essentially involved the backers Kohlberg Kravis Roberts, TPG Capital and Goldman Sachs taking a huge chance on the price of natural gas. If it rose, the utility’s coal-powered generators would become highly profitable. With largely fixed costs, the power they produced could be sold at a relatively high price set by the cost of gas. The bet misfired as gas prices plummeted…
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