La Paloma Generating looks to use collected revenue as cash collateral

By Caroline Salls

Pittsburgh, April 19 – La Paloma Generating Co., LLC requested court approval to use revenue collected post-bankruptcy as cash collateral, according to a motion filed Wednesday with the U.S. Bankruptcy Court for the District of Delaware.

The company said the revenue in question was collected with the consent of parties who are asserting disputed security interests.

La Paloma said the cash collateral it has been using to fund its Chapter 11 cases, which is tied to a SunTrust letter-of-credit facility, will most likely be exhausted in May.

“As a result, the debtors need access to the revenue they have generated during these cases to prevent disruption to their operations and the trajectory of their Chapter 11 cases during a critical period in which the debtors intend to negotiate and propose a Chapter 11 plan and commence a sale process,” the motion said.

The company said the post-bankruptcy revenues, including the $13.5 million that has been collected to date, would help it meet its liquidity needs through June 10.

A hearing is scheduled for May 10.

La Paloma is a 1,022 MW combined-cycle gas-fired power plant located in Kern, Calif. The company filed for bankruptcy on Dec. 6 under Chapter 11 case number 16-12700.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.