Bankrupt Retail Supplier Seeks To Reject Group Of Non-Residential Contracts, Return Customers To Default Service -- EnergyChoiceMatters.com

Bankrupt Retail Supplier Seeks To Reject Group Of Non-Residential Contracts, Return Customers To Default Service

Working On Sale For Remaining Small Book

Supplier Says, Generally, Its Current Market Rates Exceed SOS Rates

October 21, 2021

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Reporting by Paul Ring • ring@energychoicematters.com

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Liberty Power Holdings, LLC and certain affiliates (Debtors or Liberty) filed a motion in a bankruptcy court seeking authority to reject certain non-residential contracts which will not be part of any sale to other retail suppliers

As previously reported, Liberty has sold all its residential contracts and select non-residential contracts in the East to NRG Energy.

"Separate and apart from the Residential Customer Contracts and the East Commercial Contracts being sold to [NRG], the Debtors are currently providing electricity under an additional 1,160 non-residential customer contracts in the East, which contracts are not being sold to the Buyer and which contracts consist of approximately 3,466 separate sub-accounts (collectively, the 'Selected Non-Residential Customer Contracts')," Liberty said

Of these contracts, Liberty is presently negotiating a potential transaction for the sale of 549 non-residential customer sub-accounts

Liberty is seeking to reject the remaining Selected Non-Residential Customer Contracts that would not be part of this additional sale. Furthermore, if a sale of the 549 non-residential customer sub-accounts is not consummated, Liberty would reject those contracts as well

"The Debtors have determined, in the reasonable exercise of their business judgment, that the Selected Non-Residential Customer Contracts no longer serve any business purpose for the Debtors and are burdensome to the Debtors’ estates. Despite the Debtors’ marketing efforts, the Debtors have not been able to generate a cost effective transaction for the sale and assignment of the Selected Non-Residential Customer Contracts. As a result, the Debtors have concluded that the best course of action for the Debtors and their bankruptcy estates is to reject the Selected Non-Residential Customer Contracts and to transition the customers thereunder to another provider of electrical service in their respective States," Liberty said

"The Debtors do not anticipate any meaningful rejection damage claims because the Debtors understand that the rates being charged by the alternate providers in the East, which are the local utility companies, are generally below the current market rates charged by the Debtors. Additionally, the Debtors understand that the local utility companies are prohibited from earning a margin on the sale of electricity supply. Consequently, the Debtors believe that many of their customers under the Selected Non-Residential Customer Contracts will experience a rate reduction as a result of being returned to the local utility company, and therefore not be damaged by the proposed rejection hereunder," Liberty said

Liberty represented that, "The Debtors have conferred with their senior secured lender, Boston Energy Trading and Marketing, LLC ('BETM') concerning the relief requested herein and BETM has no objection."

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