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Update: Size Of Brilliant Energy Postpetition Financing Revealed

(From 4/2): At Least 18 Interested Parties Already Active In Brilliant Energy Sale Process

Brilliant Trustee Seeks Approval For Post-Petition Financing Facility

Trustee Re-engages Former Employees To Resume Customer Billing, Customer Service Backlog

April 5, 2021

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Copyright 2010-21
Reporting by Paul Ring •

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Updated, 4/5

The trustee for Brilliant Energy on April 3 filed in a bankruptcy court its previously reported motion for postpetition financing in the form of a trustee-in-possession (TIP) multi-draw term loan facility

The amount of the TIP facility is $7.5 million upon entry of an initial court order, and up to $14 million upon a final order

As previously reported, the TIP Lender is DTE Energy Trading, Inc.

The trustee said, "The incurrence of new debt under the TIP Documents and use of Cash Collateral is necessary and vital to maximize a recovery from a sale of the Debtor’s assets."

Specifically, in the motion, the trustee for Brilliant Energy sought an order, "Authorizing the Trustee to obtain postpetition financing under a superpriority, priming, trustee-in-possession multi-draw term loan facility (the 'TIP Facility') consisting of (a) up to $7,500,000 of new money to be made available upon entry of the Interim Order (the 'Interim Amount'), and (b) up to $14,000,000 of new money to be made available upon entry of the Final Order (the “Final Amount”), while applying (i) certain of the Debtor’s cash collateral and future customer receivables and (ii) subject to an agreed-upon carve-out, the proceeds of an anticipated sale of customer contracts and related assets, to the Prepetition Obligations (as defined [in the motion]), so as to effectuate a Gradual Roll-Up pursuant to the terms and conditions of the TIP Agreement"

Earlier (4/2/21):

During a status conference in the bankruptcy proceeding of Brilliant Energy, the bankruptcy trustee for the retail electric provider said that the sale process for the REP has attracted 18 interested parties thus far

The trustee is in the process of executing non-disclosure agreements with such parties and has prepared a virtual data room

The trustee will be making a forthcoming motion with the court regarding the sale process for Brilliant Energy. The trustee envisions a "fast effort" for interested parties to provide their best offers after completing their due diligence

The trustee would then hold an auction in the courtroom, virtually

The bankruptcy judge again emphasized, as he did previously (see prior story here), that the sale process doesn't need to be overloaded with "formality", and that it should happen sooner rather than later to preserve as much value in the business as possible. However, the judge stressed that the trustee should err to being overly transparent with the Texas PUC and ERCOT concerning the sale process to ensure there are no regulatory surprises

The trustee also noted in a motion (seeking relief from utility shut-offs) that the trustee will also be filing a motion for authorization to use certain cash collateral and to enter into an agreement for a post-petition financing facility (the TIP Facility) with their pre-petition secured lender and wholesale energy provider, DTE Energy Trading, Inc. (the TIP Lender).

The PUC has received complaints from customers of Brilliant Energy about bills not being issued and phone calls to the company not being answered. Such complaints are also apparent on social media

The trustee said that they have recently been authorized to re-engage several employees to resume the customer billing process and customer service functions.

With such employees re-engaged, Brilliant Energy has begun working through a backlog of 900 customer inquiries.

The trustee said that most of the responses from customers, as the REP has worked through this backlog, have been positive, with customers understanding the issues. The trustee said that there hasn't been a rash of "hostile" calls

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