Dynegy Examiner Cries Fraud Over Coal Transfers

Law360, New York (March 9, 2012, 5:17 PM EST) -- The examiner appointed to investigate Dynegy Holdings LLC's $1.7 billion prebankruptcy restructuring released a report Friday finding that its transfer of coal assets to parent Dynegy Inc. constituted a fraudulent transfer illegally designed to benefit shareholders.

Dynegy and four subsidiaries filed for court protection Nov. 7, but Dynegy Inc., the parent company, stayed clear of the fray, along with the power company’s most valuable assets — groups of coal-fired and gas-powered facilities that were transferred to the parent in the restructuring.

The examiner, Susheel Kirpalani of...
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