Judge Burton Lifland of the US Bankruptcy Court for the Southern District of New York on Thursday granted Calpine Corp's request to seal any details of proposed risk management procedures to be implemented at the company's trading arm, Calpine Energy Services.
Calpine's unsecured and secured creditors have asked the bankruptcy court to enforce some trading restrictions on CES to eliminate the possibility of further losses due to speculative trades.
Calpine and CES have been operating under an interim order from the bankruptcy court since filing for Chapter 11 bankruptcy protection on Dec 20. Calpine is seeking a final order from the court to improve its ability to make and execute power and gas trades.
Calpine's attorneys told the judge Thursday that CES was having difficulty executing trades without a permanent court order regulating its trading operations.
The ability to trade is instrumental to the stability of Calpine's financial position and the smoothing of the transition during a difficult period for Calpine, an attorney for the firm said in court.
Lawyers for Calpine's creditors, including the committee of unsecured creditors, supported Calpine's motion and told the judge they were working on an agreement for a final order regarding the rules Calpine will have to follow in conducting its trading business.
Also on Thursday, as part of finalizing its $2-bil debtor-in-possession (DIP) collateral structure, Calpine said it has paid off the existing operating lease and related debt for its Geysers geothermal assets for approximately $275-mil. As previously announced, Calpine said that it intended to retire certain obligations at The Geysers through its $2 billion DIP facility, which was approved on Jan 25.
With this transaction, Calpine has a 100% ownership interest in the Geysers assets, which are in northern California. The company's DIP facility will be secured by these Geysers assets, together with liens on all of the unencumbered assets and junior liens on all of the encumbered assets of Calpine and its subsidiaries that are debtors-in-possession.
The company previously leased its 19 Geysers power plants from Steam Host LLC and sold up to 750 MW of geothermal into the northern California power market.
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judge gives 30 days for RMR settlement
Feb 13, 2006
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