Posted on April 4, 2012 at 9:45 AM
HOUSTON—Utility company Dynegy Inc. says it reached an agreement with creditors that will let the company move forward with bankruptcy proceedings for a subsidiary.
Dynegy said Wednesday that the agreement ends disputes over $2.5 billion in claims related to Dynegy Holdings LLC.
Shares of Dynegy fell 6 cents to 46 cents per share in morning trading.
The agreement says that unsecured creditors will get common stock in the reorganized company. Under the current plan, those creditors were slated to get new senior secured notes and preferred stock.
The agreement will be filed as a settlement in the Dynegy Holdings Chapter 11 bankruptcy case.
Last month a court-appointed examiner said Dynegy’s subsidiary fraudulently transferred coal power assets to the parent company, which is not in bankruptcy protection.