Bankrupt Retail Supplier Enters Stalking Horse Agreement For Sale

Liberty Power Holdings, LLC, Liberty Power District of Columbia, LLC, LPT, LLC, and Liberty Power Maryland, LLC (collectively, Liberty or Debtors') have filed for approval at a bankruptcy court to designate NRG Retail, LLC as a stalking horse bidder

A Stalking Horse Agreement between Liberty and NRG provides for the sale of a substantial portion of the Debtors' "book of business," namely all of the Debtor's residential customer contracts and a portion of the Debtors' commercial customer contracts.

The total purchase price (subject to adjustment and reconciliation as set forth in the Stalking Horse Agreement) for the assets is based on the ultimate number of 'residential customer equivalents' or 'RCEs' included in the Debtors' Customer Contracts that are transferred to the Stalking Horse Buyer or Successful Bidder.

Based on the Debtors' estimate of the total number of RCEs that will be transferred to the Stalking Horse Bidder, the total purchase price for the Debtors' Customer Contracts under the Stalking Horse Agreement will equal approximately $36,386,951

The purchase price reflects the following:

(i) Texas Residential Contracts - All of the Debtors' residential customer contracts for customers located in Texas (the 'Texas Residential Contracts') for a purchase price equal to $340 per RCE, which based on the Debtors' estimated number of RCEs for such Texas Residential Contracts as of August 16, 2021, equals an estimated purchase price (subject to adjustment and reconciliation as set forth in the Stalking Horse Agreement) of $11,934,499;

(ii) East Residential Contracts - All of the Debtors' residential customer contracts for customers located outside of Texas (the 'East Residential Contracts') for a purchase price equal to $290 per RCE, which based on the Debtors' estimated number of RCEs for such East Residential Contracts as of August 16, 2021, equals an estimated purchase price (subject to adjustment and reconciliation as set forth in the Stalking Horse Agreement) of $17,109,836; and

(iii) East Commercial Contracts – Certain of the Debtors' customer contracts with small/medium sized commercial businesses located outside of Texas (defined as those customers with less than 17.5 RCEs or 175,000 kwh of annual consumption), which are as set forth in the Stalking Horse Agreement (the 'East Commercial Contracts') for a purchase price equal to $165 per RCE, which based on the Debtors' estimated number of RCEs for such East Commercial Contracts as of August 16, 2021, equals an estimated purchase price (subject to adjustment and reconciliation as set forth in the Stalking Horse Agreement) of $7,342,616.

If the Debtors consummate an Alternative Transaction, the Stalking Horse Agreement requires the Debtors to pay a 'break-up' fee in the amount of $1,000,000

In addition, if the Debtors consummate an Alternative Transaction, the Stalking Horse Agreement also requires the Debtors to reimburse the Stalking Horse Bidder its reasonable and documented out-of-pocket costs, fees and expenses in an amount not to exceed $300,000 incurred by the Stalking Horse Bidder in connection with its evaluation, consideration, analysis, negotiation, or documentation of the transactions contemplated in the Stalking Horse Agreement (the 'Expense Reimbursement').

Liberty said, "The Debtors believe that the Stalking Horse Agreement will set the stage for competitive bids and allow for a more streamlined process related to Qualified Bids and an Auction. To that end and notwithstanding entering into the Stalking Horse Agreement, the Debtors anticipate that they will receive Qualified Bids from various of the other prospective bidders, which the Debtors believe will lead to an Auction. The Debtors are continuing to work with other interested bidders and will do so through the extended Bid Deadline."

Earlier, Liberty received approval to adjust the bid deadline and auction date, noted below:

Earlier:

Liberty Power Holdings, LLC and related debtors (hereafter, "Liberty") have extended the bid deadline under the sale process in Liberty's Chapter 11 bankruptcy proceeding

Specifically, with the consent of its senior secured creditor, Boston Energy Trading and Marketing, LLC (BETM), Liberty extended the bid deadline such that qualified bids must now be submitted no later than August 30, 2021 at 2:00 p.m. (prevailing Eastern Time).

The bid deadline had originally been Aug. 19

In addition, Liberty has continued the date of the auction for the assets, if necessary, to take place on September 1, 2021 at 9:00 a.m. (prevailing Eastern Time)

The sale hearing has been continued by order of a bankruptcy court and shall be held before the bankruptcy court on September 10, 2021 at 1:30 p.m. (prevailing Eastern Time).

In a statement released at the time of its initial Chapter 11 filing, Liberty Power Holdings had said that it serves over 330,000 "retail customer equivalents."

Case No. 21-13797-SMG et al.