Here's a reorganization case striking close to home.
Sundevil Holdings LLC, which operates two gas-fired power plants in Gila Bend, Arizona filed for Chapter 11 protection, Reuters reported. The company, owned by private equity firm Wayzata Investment Partners, listed $100 million to $500 million of both assets and liabilities in its filing with the U.S. Bankruptcy Court in Wilmington, Del. The company said that it would seek court approval to borrow $45 million to support its operations during its bankruptcy.
Lillian Rizzo, of the Wall Street Journal, reported the following details:
"The company blamed its recent struggles on depressed electricity prices in its market as well as faltering natural gas and energy prices.
Sundevil’s troubles come after it purchased the Arizona plants following the financial downturn with hopes of an increased need for gas-fired power. However, actual demand never met Sundevil’s expectations, and there was a slower than expected retirement of older, inflexible coal-fired generation.
Prior to filing for bankruptcy, Sundevil hired an investment banker in June 2015 to find another investor or buyer. Despite attracting some interested buyers, a party has yet to commit to buy some or all of the assets, according to court papers.
The company hopes to sell itself through a bankruptcy-auction process and has proposed an April 29 deadline to receive bids and an auction to be held on May 2.
Sundevil owns two of the four natural-gas fired plants in the Gila River Power Station in Arizona, which sells energy to consumers in Arizona, New Mexico, and southern Nevada.
The company was formed in 2010 when Wayzata purchased the two power plants from an affiliate of Entegra Power Services LLC. Entegra itself filed for bankruptcy in August 2014, emerging a few months later after cutting $750 million in debt from its books.
Sundevil’s plants haven’t been in operation since October 2015, since it wasn’t “economical for them to do so,” said Raphael T. Wallander, a principal at Wayzata, in court papers."