S&P: Calpine’s Bid To Toss Contracts Looks "Murky"

Law360, New York (February 15, 2006, 12:00 AM EST) -- Calpine Corp.’s recent attempts to scrap contracts signed before its bankruptcy may undermine bondholders' ability to recover their money from the power producer, according to a report released by Standard & Poor's this week.

S&P, which lowered its ratings on the electric power giant and some of its subsidiaries when the company filed for Chapter 11 bankruptcy last December, says that Calpine’s bid to toss the contracts constitutes a “jurisdictional quagmire.”

Given the history of power companies attempting to reject power contracts in bankruptcy proceedings, S&P...
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