Background

With dual headquarters in San Jose, California and Houston, Texas, Calpine Corporation is a nationwide power producer with more than 90 power plants and 3,300 employees in 21 states.  The company is a major supplier to the California electricity grid, providing roughly 10% of the grid’s capacity.  Mainly fired by gas, Calpine has approximately 24,000 megawatts of generating capacity.

During the late 1990s, Calpine began a leveraged power plant expansion just before electricity markets began to falter during California’s power crisis and the Enron scandal.  Due to a volatile electricity market, rising credit costs, declining prices for electricity and $18 billion in debt, Calpine, along with 272 of its subsidiaries and affiliates, filed for Chapter 11 protection in the Southern District of New York on December 20, 2005.  During the Chapter 11 process, Calpine’s power plants continued operations, providing reliable supplies of electricity without service disruption.

Results

In conjunction with Calpine’s team of professionals at Kirkland & Ellis LLP, KCC and AlixPartners were engaged to facilitate the claims administration of one of the nation’s largest Chapter 11 restructuring cases ever filed.  The team worked together to compile the creditor matrix of over 100,000 potential creditors and prepared and filed 273 sets of Schedules of Assets and Liabilities and Statement of Financial Affairs.

Throughout the duration of the case, KCC coordinated with AlixPartners to manage claims objections and reconciliation for over 20,000 claims.  KCC’s high-volume production facilities, coupled with access to the latest shipping deadlines in the country, played an integral role in the printing and timely distribution of creditor notices.  KCC CaseView, KCC’s proprietary technology platform, was instrumental in aggregating voluminous amounts of data in preparation for disbursements.

Securing $7.3 billion in exit financing, including a one-year, $300 million bridge facility, Calpine emerged from Chapter 11 on February 1, 2008.   Under The Plan of Reorganization, the company was able to reduce its debt by $7.2 billion.  Senior note holders will recover 100 percent of their allowed claims, unsecured creditors 99.9 percent and subordinated note holders 75 percent.  The company plans to issue 485 million shares of reorganized common stock to holders of allowed claims.

Today, Calpine is the nation’s largest independent power producer.  Stronger post-restructuring, the company is well-positioned for growth in the energy industry.   Calpine’s new stock is trading on the New York Stock Exchange under the ticker symbol CPN.

To learn more about how KCC can help ensure your success, email or call us at 866.381.9100.