Bloomberg
Griddy will cancel Texas energy bills if customers fail to sue
(Bloomberg) – Griddy Energy LLC has a final deal for Texans before the energy seller closes for good: if its 29,000 former customers agree not to sue, the company will cancel electricity bills that were about 300 times normal in the midst of last month’s winter storm. On their first day in bankruptcy court, Griddy’s lawyers drew up a plan to settle, make a deal with customers and possibly set up lawsuits against those the company blames for its collapse. The company also obtained permission from the court to pay its remaining employees and other routine bills while the Chapter 11 case moves on. US bankruptcy judge Marvin Isgur called Griddy’s bankruptcy proposal “unique and truly unprecedented”. Isgur, who oversaw some of the biggest corporate restructurings on file in recent years, pressured Griddy to ensure that clients understood how the bankruptcy case would affect their huge electricity bills after first criticizing Griddy’s attempt to pay off one of his creditors as he went. the case moves forward. Customers face an average bill of about $ 1,100 because of the winter storm that raised energy prices, Isgur said. If Griddy wants to cancel these charges in exchange for customers giving up on possible lawsuits, the company should make it clear that people before they vote on the proposal, Isgur said. Customers will be considered creditors who have the right to vote on the liquidation plan before Isgur decides whether to approve it. “This is a difficult case,” said Isgur. “I’m really concerned with handling it properly.” Surging PricesGriddy filed for bankruptcy on Monday, blaming the Texas Electric Reliability Council, which runs the state’s power grid. During the storm, Ercot, as he is known, dramatically increased wholesale energy prices under rules that Texas lawmakers have adopted that have deregulated much of the state’s electrical industry over several decades. Griddy was barred from entering the state’s energy markets in late February after failing to make a payment. Griddy charged wholesale prices instead of fixed prices. Knowing that the tariff structure would mean massive bills for its customers as energy prices went up, the company made the unusual move to beg them to switch to another supplier in mid-February. Some customers who did not change in time were trapped with thousands of dollar bills. Isgur told the chief lawyer that he is suing Griddy on behalf of clients that the company deserves some credit for making this effort. to do something wrong, ”said Isgur of the company. “But I may have someone here who may have done something wrong. It is too early to make that determination. ”Griddy will try to get final approval for his Isgur liquidation plan within 85 days, said Robin Spigel, of Baker Botts, in court on behalf of the energy company. One option being considered is to hire an administrator who would decide whether to take legal action to try to collect money that would go to Griddy’s creditors, Spigel said. The case is Griddy Energy LLC, 21-30923, US Bankruptcy Court for the Southern District of Texas (Houston). To see the summary of the Bloomberg Act, click here. (Updates with the customer’s vote on the settlement plan in the fourth paragraph) For more articles like this, visit us at bloomberg.comSubscribe now to stay on top of the most trusted business news source. © 2021 Bloomberg LP