LAWFUEL – First for law, legal, law firm news – In October 2002 Herbert Smith acted for TXU Europe Group plc (TXUEG) in connection with the sale of its power supply and generation assets to Powergen. Since that date Herbert Smith’s corporate recovery team led by Kevin Pullen has advised Ernst & Young LLP as administrators of the TXUEG group of companies. The administrators currently hold approximately £1.7
billion of assets, with creditors of approximately £3 billion.
Since October 2002, Herbert Smith has advised Ernst & Young LLP, the
administrators, on the many complex and contentious issues which have arisen
from the insolvency of the TXUEG group. This, along with the competing
interests of the various creditor groups, has meant that it has not been
possible to make a distribution of assets to creditors until this time.
On 3 December 2004 the administrators completed the first stage of the
process to distribute the proceeds of that sale and the group’s other assets
to its creditors by issuing a Pathfinder which provides details of company
voluntary arrangements (CVAs) for the majority of the companies in the TXUEG
group.
The publication of a pathfinder document begins the final stage of
implementing the CVAs for each of the principal companies in the TXU
European group. If supported by the creditors, the CVAs will provide for
arrangements between 28 companies and each of their creditors, distributing
approximately £1.7 billion of assets against approximately £3 billion of
debt.
The Herbert Smith team was led by Kevin Pullen and Alison Deeth of Herbert
Smith’s corporate recovery team. Alison Deeth commented:
“TXU was the highest profile collapse in the UK power sector. Both by value
and size the proposals put forward in the Pathfinder will result in the
largest and most complex CVA ever proposed, involving 28 interlocking
arrangements and providing for the settlement of complex litigious disputes
within the group and with external creditors. This transaction has
demonstrated the ability of the corporate recovery team and other practice
groups across Herbert Smith and the Herbert Smith, Gleiss Lutz and Stibbe
alliance, to work together to achieve a positive result for our client.”
Mark Sterling and Katrina Buckley of Allen & Overy advised the KPMG
administrators of the TXUEG group.
