⚡️New Chapter 11 Bankruptcy Filing – Liberty Power Holdings LLC⚡️

On April 20, 2021, Liberty Power Holdings LLC and three affiliates (together, the “debtors”), filed chapter 11 in the Southern District of Florida. Between the weather and the recent Bitcoin conference, south Florida is hot right now. Ironically, this filing is all about cold weather.

Liberty is a retail energy provider that operates in fourteen states across the country, including Texas. Liberty is a party to a number of agreements with Boston Energy Trading and Marketing, LLC (“BETM”) that provide Liberty with credit support, hedges, working capital, and operational support. In certain respects, BETM effectively acts as a guarantor when independent system operators provide Liberty with electricity.

In February 2021, Winter Storm Uri threw this operation into a tailspin. As the debtors describe:

[The Electric Reliability Council of Texas (“ERCOT”)] set wholesale energy and ancillary services prices at stratospheric and unprecedented levels, creating a “perfect storm” of conditions that were impossible for [Liberty] and other market participants to anticipate or prepare for. These events, in turn, resulted in the Debtor incurring a financial charge from ERCOT that was well beyond its capability to pay. In fact, such charge was larger than the amount of credit that BETM would have provided otherwise to [Liberty] under the Supply and Services Agreement. Primarily because of this storm event, Holdings became unable to pay its debts when due and had liabilities in excess of its assets.

The debtors estimated that they had approximately $50–100m in assets and $100–500m in liabilities. Of that, $81.3m is owed to BETM under the Supply and Services Agreement.

The Texas legislature has passed a new bill aimed at preventing another crisis like this from happening, but it doesn’t seem like there was any retroactive action that will help the debtors’ current situation.

Date: April 20, 2021

Jurisdiction: S.D. Fla. (Judge Scott M. Grossman)

Company Professionals:

  • Legal: Genovese Joblove & Battista, P.A. (Paul J. Battista)

  • Financial Advisor: Berkeley Research Group (Bob Butler)

  • Claims Agent: Stretto (Click here for free docket access)

Other Parties in Interest:

  • Boston Energy Trading and Marketing, LLC

    • Legal: Berger Singermann LLP (Jordi Guso)

  • Public Utility Commission of Texas

    • Legal: Office of the Attorney General of Texas (Jason B. Binford, Layla D. Milligan)