Dynegy's Crafty Filings Threaten Bankruptcy Status Quo

Law360, New York (November 8, 2011, 8:17 PM EST) -- With its atypical bankruptcy filings, Dynegy Holdings LLC has challenged the basic order of a Chapter 11 restructuring, rigging the process to benefit billionaire investor Carl Icahn and other shareholders at the expense of typically first-in-line bondholders, attorneys say.

On Monday, Dynegy Holdings and four of its subsidiaries filed Chapter 11 petitions. But in an unusual twist, the revenue-rich, debt-light parent company stayed out of the bankruptcy case, prompting cheers from Wall Street and an 81-cent bump in Dynegy Inc.'s stock price.

The move essentially jumped...
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