Cross border insolvencies and financial restructurings are remarkably opaque considering we live in the Information Age. The mission of the Centre of Main Interest (the COMI) is to light some candles in the darkness and create a forum for further discussion. The Law Offices of Tally M. Wiener, Esq. are pleased to publish the COMI blog.
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Saturday, December 29, 2012
Edison International Units Sued by Chevron Over Oil Fields
By Phil Milford - Dec 27, 2012 1:00 PM ET
Units of Edison International were sued by affiliates of Chevron Corp. (CVX), which asked a bankruptcy judge to help facilitate their attempted $82.5 million purchase of a joint oil-field support venture near Bakersfield, California.
Chevron’s Kern River and Sycamore Cogeneration affiliates said Edison International’s bankrupt Edison Mission Energy plans to turn over its share of the venture to creditors as part of a Chapter 11 reorganization, according to a complaint filed yesterday in U.S. Bankruptcy Court in Chicago.
“The prospect of an involuntary partnership, much less with uncertain or unqualified partners, is contrary to the law and abhorrent to plaintiffs,” the Chevron affiliates said in their complaint.
The affiliates asked the judge to rule that the Edison Mission Energy bankruptcy constitutes a default and that the partners cannot be forced to associate with each other. The affiliates also want an order permitting Chevron, the second- largest U.S. oil company, to “expel” the defaulting partner and buy out its interest, according to the complaint.
The Chevron affiliates said they offered $82.5 million, or “substantially more” than book value, on June 29 to purchase partnership entities. According to the filing, Edison Mission Energy President Pedro Pizarro said the offer was “insufficient.”
Edison Mission Energy, the unregulated generating unit of Edison International (EIX), filed forbankruptcy protection Dec. 17, saying it had reached agreement on a reorganization plan with its parent and holders of its $3.7 billion in debt. The Santa Ana, California-based company listed $5.13 billion in assets and $5.09 billion in liabilities.
Southern California Edison, another Edison International unit, is California’s second-largest utility, providing power to 14 million people, according to the company’s website. PG&E Corp. (PCG), based in San Francisco, owns California’s largest electric utility.
The Kern River Cogeneration Co., a joint venture between Edison International and San Ramon, California-based Chevron, operates gas-fired plants to generate electricity and steam, which is used to soften heavy crude oil beneath nearby oil fields and hasten extraction, according to the complaint.
Edison International spokesman Charles Coleman didn’t immediately return a phone call seeking comment on the lawsuit.
The case is In re Edison Mission Energy, 12-49219, U.S. Bankruptcy Court, Northern District of Illinois (Chicago).