Retail Supplier Files For Bankruptcy
August 28, 2018 Email This Story Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • firstname.lastname@example.org
The following story is brought free of charge to readers byEC Infosystems, the exclusive EDI provider of EnergyChoiceMatters.com
Note: This story was first published the evening of Aug. 28 with an alert to our email subscribers
New York-based ESCO Clear Choice Energy, LLC and affiliate Big Apple Energy, LLC have filed voluntary petitions for bankruptcy under Chapter 11 in the Bankruptcy Court for the Eastern District of New York
In a motion for authorization to pay critical vendors, Clear Choice Energy, LLC (Debtor) stated, "The Debtor's bankruptcy case was commenced on an emergent basis as a result of a decision made by its senior secured lender on August 23, 2018. As a result, proposed counsel for the Debtor has had limited time to assemble and draft the pleadings necessary to commence the Debtor's bankruptcy case in an effort to preserve the value of the Debtor's assets for the benefit of its creditors and the within bankruptcy estate, to preserve jobs, and to preserve its ability to provide wholesale electricity and gas to its customers who in tum will then able to supply such to the end users."
In a motion for authorization to pay critical vendors, Clear Choice Energy, LLC (Debtor) stated, "The Debtor's bankruptcy filing was necessitated as a result of the acceleration by Macquarie Investment Limited, ('Macquarie'), of its $20,800,000 debt which constitutes a first priority secured claim against the Debtor's assets. The Debtor's assets are also subject to a junior priority alleged secured lien in favor of Penta Mezzanine SBIC Fund I, L.P. in the amount of approximately $4,000,000. The Debtor's Macquarie debt and Penta debt is also a joint and several liability of the Debtor's affiliate Big Apple Energy, LLC who is also a Chapter 11 Debtor before this Court."
In a motion for authorization to pay critical vendors, Clear Choice Energy, LLC (Debtor) stated, "Based upon the timing of the Debtor's obligations to provide electricity and gas service to its customers, in the immediate pre-petition time period of mere days prior to the commencement of the bankruptcy proceeding, and at a time when the Debtor was unaware it would have to seek Chapter 11 protection, it obligated itself to pay approximately $3,547,402.77 to New York Independent System Operator (the 'ISO'), in order to reserve capacity for electricity transmission."
On August 28, Clear Choice Energy, LLC (Debtor) sought entry of an interim and final order authorizing the Debtor to obtain post-petition financing from Macquarie Bank Limited, in an amount of up to $6.25 million
In such motion, Clear Choice Energy, LLC said, "As of the commencement of the bankruptcy proceeding, upon information and belief, the Debtor's assets were subject to a fully perfected alleged secured claim constituting a first priority claim in favor of Macquarie in the amount of approximately $20,800,000."
"In order to continue to operate its business, to preserve asset values for the benefit of its creditors and the within bankruptcy estate, to continue to employ its employees, and to continue to be able to provide gas and electric service to its wholesale customers who in turn will then be able to supply utility service to its end users, it is reasonable, necessary, and appropriate that the Debtor be authorized to use cash collateral of Macquarie and to obtain DIP financing from Macquarie," Clear Choice Energy, LLC said
The Court will consider the motions on August 29
On August 28, pursuant to Section 188.8.131.52 of the NYISO's Open Access Transmission Tariff and Section 7.5.5 of the Market Administration and Control Services Tariff, the NYISO provided notice to all customers of the Creditworthiness Default of Clear Choice Energy, LLC