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San Jose, CA, Dec. 27, 2005 -- Embattled Calpine Corp. announced that it has received approval of first day motions from the U.S. Bankruptcy Court for the Southern District of New York. During a hearing held Dec 26, 2005, before the Honorable Burton R. Lifland, Calpine submitted a number of motions requesting approvals and received, among other things, interim authorization to continue to perform under power trading contracts and the immediate use of $500 million of its $2 billion debtor-in-possession (DIP) financing facility. The company also received authorization to continue paying employee wages and salaries and providing benefits.
Robert P. May, Calpine's recently installed CEO, said the court rulings would help the company resume normal business operations as well as provide "liquidity and flexibility" for the company.
Calpine received interim Court approval for the immediate use of up to $500 million of its $2 billion DIP financing facility. The company has received commitments for the DIP facility from Deutsche Bank and Credit Suisse First Boston. The Court has scheduled a hearing for January 25, 2006 to consider final approval of the entire $2 billion DIP financing facility.
Calpine also received authorization from the Court to pay pre-petition and post-petition employee wages and salaries, and provide benefits, including healthcare, disability, life insurance and certain vacation benefits, during its restructuring under Chapter 11.
On December 20, 2005, Calpine and many of its subsidiaries, including Calpine Generating Company LLC, filed voluntary petitions to restructure under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York in Manhattan.
For related stories, please read these articles:
Calpine files for bankruptcy
Calpine given time to repay debts, but not much
Calpine's common stock to cease trading on NYSE
Fitch says Calpine exposure does not adversely affect public power sector
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