$7B Tax Bill Could Force Energy Future Into Ch. 7

Law360, New York (October 2, 2014, 3:59 PM EDT) -- Energy Future Holdings Corp. told a Delaware bankruptcy court on Wednesday that it may be forced to scrap plans to reorganize under Chapter 11 and instead liquidate under Chapter 7 because the sale of its assets could generate a tax bill of up to $7 billion, which the company cannot pay.

EFH had been granted an extended exclusivity period to put together a reorganization plan involving the sale of assets belonging to its subsidiaries, but the company said in a tax memo filed with the court that the Internal Revenue Service would likely oppose such a plan because of the potential for...

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