Posted on 12/24/2005 9:59:34 AM PST by MeneMeneTekelUpharsin
The uncertainty hanging over the outcome of Calpine's bankruptcy is making life especially scary for Ma-and-Pa creditors like Mary and Budd Elliff, who say the San Jose electricity generator owes them several hundred thousand dollars. Calpine, which filed for Chapter 11 protection Tuesday, has reported $22.5 billion in liabilities and about $27 billion in assets. But some analysts think the company may be worth far less. With 3,500 creditors after Calpine's money, the Santa Rosa couple fear they and other small operators will wind up empty-handed in the bankruptcy proceedings. If anyone is likely to lose out, ``it's the local businesses, it's the fuel suppliers, it's the small-parts businesses,'' said Mary Elliff, who said her husband supplies cranes that help maintain Calpine's geothermal plant near Napa. And that would be unfair, she added, because as loyal Calpine suppliers over the years, ``we're the ones that kept the lights on.'' No one could be reached at Calpine to discuss the Elliffs' bill. Calpine spokeswoman Katherine Potter said the company has every intention of eventually honoring its financial obligations with its suppliers and other creditors but was vague about how the company would do that. Excerpted... the rest can bread here: Click here.
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This reminds me of the Christmas dinner in which one woman was thoroughly roasting the lawyers in her bankruptcy case in which she lost most of her wealth. She ended with "And do you you know who got most of my money? The bottomfeeding scavenging lawyers, that's who." Being as to how they were several attorneys present, the room got quiet. Then one of the lawyers wife broke the silence by declaring " I just love a story with a happy ending".
Yup, these creditors are toast. The bottom line, though, is that Calpine had no choice. Some of its creditors refused to play ball, and that means bankruptcy is inevitable.
Well, perhaps those creditors will lose a significant amount of their investment for being so greedy. Looks like Calpine may be considering a quick exit from bankruptcy, cancellation of contracts, major reduction for 2nd-lien holders' recovery and cancellation of the common stock. Ameritrade will NOT allow anyone to make an opening position in the stock -- that's odd considering they let other "Q" stocks trade. A lot of stock traders are very angry about that. It's basically killed the post-bankruptcy bounce most stocks make.
It depends. On rare occaision, the smallest fish will get taken care of just to get them out of the way so the big boys can play. That being said, it sounds like this guy might be too large to be treated that way. But yes, if they are still around when the plan gets confirmed, they are likely to get hosed.
Well, of course Gray Davis is most responsible. But Arnold hasn't exactly helped. Holding down retail prices while deregulating wholesale costs was a recipe for disaster.
It's to bad. I liked what Calpine was doing with geo-plants. Seemed like a great company back in the "rolling blackout" days of Gray Davis.
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