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Sid Scheinberg Interview - Energy Future Holdings Bankruptcy
Posted By Godwin Bowman & Martinez || Apr 29, 2014
KRLD Reporter, Chris Sommers, Spoke with Local Attorney Sid Scheinberg of Godwin Bowman & Martinez
Chris:"With about $40 billion in debt; Energy Future Holdings simply had no other choice. What are your thoughts on that?
Sid: “Basically they borrowed too much money for the company. Something went wrong in energy tradings, and all the money that they invested…it wasn’t enough to make the company work, if that makes sense.”
Chris: "So we’ve heard a lot of people tell us today that, the typical customer…this is not going to impact them at all…"
Sid: “No, I don’t feel that it will impact anyone, although with those free months that they were promising in all their radio ads, I assume they will be able to continue with those…sort of like the airlines with frequent flyer programs, but that could be a little bit of a concern for a customer if they had some sort of special deal… if they get a free month down the road or something like that.”
Chris: "When a lot of us think of a recent corporate bankruptcy, we think of the American Airlines situation. Are these two cases similar at all?"
Sid: "I think they’re a little bit similar…and I think that’s why Energy Future Holdings was a little bit reluctant to file, because if you look at American Airlines…it worked out well, but I don’t think it’s what the directors…or at least the prior directors of American Airlines wanted. I really don’t believe they wanted the people from US Air to come in and take over. When you go into a bankruptcy court, even though you may have a “pre-packaged bankruptcy” it may not end up that way. The judge is the ultimate decision maker, and it’s based upon what’s best for the creditors and everyone involved in the case…not necessarily who is charge of the company now.”
Chris: “Now as part of this process, will the various pieces of Energy Future Holdings be split up?”
Sid: “What I’m reading, it looks like they are going to be split up into the various operating entities. Certain things…I think as dynamic as the Dallas/Fort-Worth area is, the energy portion…the Oncor operation is something that is certainly very valuable that people want. Other of their operations, perhaps a nuclear plant, could be spun off into another entity, maybe nobody wants the risks that are involved in operating those units.”
Chris: “And what is it that makes Oncor so attractive? Is it the fact that they are regulated?”
Sid: “Yeah I think that fact that they are regulated, and like I say, this is a booming area. Toyota announced yesterday that they are bringing 5,000 people to our area. We are certainly on the cusp of something big here in North Texas."