Calpine Settles Defaulted Bondholder Claims

Law360, New York (April 19, 2007, 12:00 AM EDT) -- Bankrupt energy company Calpine Corp. said Thursday that it had reached a preliminary settlement with a bondholder committee that will eliminate more than $8 billion in claims.

If approved by the U.S. Bankruptcy Court in Manhattan and a Canadian court, the settlement would replace more than $12 billion of claims with a single nominal claim of $3.5 billion.

Additionally, the ad hoc committee of bondholders agreed that its actual recovery would be no greater than the principal, accrued pre-petition and post-petition interest, and up to $8...
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