Just simply cannot see that Judge Morris would dismiss the ch11 filing due to the alleged FC. Judge Morris would really need to get the FC issue settled one way or the other.
Frankly, this looks like a really bold move on PSEG's part.
Here is the introduction from the 40-page filing.
>> INTRODUCTION This Court should dismiss the Debtors’ bankruptcy cases because the Debtors have fraudulently and without good faith manufactured an artificial insolvency in an effort to impose the limitations of section 502(b)(6) of the Bankruptcy Code upon a handful of the Debtors’ creditors. In In re Integrated Telecom Express Inc., 384 F.3d 108, 115 (3rd Cir. 2004), the Third Circuit ordered the dismissal of a bankruptcy petition in strikingly similar circumstances. The Third Circuit’s reasoning is directly applicable to these cases, and this Court should follow Integrated Telecom and dismiss the Debtors’ bankruptcy cases. The Debtors’ commencement of these chapter 11 cases is the most recent step in a scheme orchestrated by non-debtor Dynegy Inc. and its other non-debtor affiliates (collectively with the Debtors, “Dynegy”), along with certain members of the “Control Group.”2 Dynegy Inc. and certain members of the Control Group have fraudulently stripped value from the Debtors, and in particular Dynegy Holdings, for the benefit of Dynegy Inc. and its equity holders—and thereby created an artificial insolvency. They seek to exploit that artificial insolvency to take unfair advantage of section 502(b)(6)’s cap on certain lease rejection damages. Dynegy Inc.’s scheme, if successful, would turn the Bankruptcy Code on its head by allowing Dynegy Inc. to extract and retain much of the value of the Debtors and reap the benefits of the prepetition fraudulent transfers that rendered the Debtors artificially insolvent and caused them to file for bankruptcy relief in the first instance. Dynegy Inc. caused the Debtors to file these bankruptcy cases in the wake of three state court lawsuits, including one filed on November 4, 2011, by the PSEG Entities, all of which allege that Dynegy and certain members of the Control Group engaged in actual or constructive fraud when they rendered Dynegy Holdings artificially insolvent by engaging in a restructuring scheme designed solely to benefit Dynegy Inc. and its shareholders, including Icahn Capital and Seneca, at the expense of Dynegy Holdings and its creditors.3 <<
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