La Paloma second-lien lenders object to ‘truncated’ asset sale process

By Caroline Salls

Pittsburgh, Aug. 28 – An informal group of La Paloma Generating Co., LLC’s second-lien lenders objected to the company’s proposed asset sale timeline, according to a filing with the U.S. Bankruptcy Court for the District of Delaware.

“The motion seeks approval of truncated procedures pursuant to which the debtors propose to sell substantially all of their assets on a timeline that is misguided and unrealistic, and should be denied,” the lender group said in its objection.

Although it is supportive of a plan process, including a sale, if appropriate, that resolves the issues raised by a pending California Air Resources Board (CARB) obligation, a lapsed unsecured creditors’ committee exclusivity termination statement and resulting valuation issues, the second-lien lenders said La Paloma’s bid procedures motion “contemplates a rushed, impractical process.”

The lender group said the process is based on a Nov. 1 CARB payment, but the relevant parties have known about this obligation for years, and the company can easily pay it.

“If permitted to proceed on the requested timeline, the debtors might just as well hand their assets to LNV, their first-lien lender,” the objection said.

A hearing is scheduled for Sept. 6.

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, 2016 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.