© 2017 The Texas Lawbook.
By Mark Curriden
(July 7) – Energy Future Holdings creditors are hoping that three times is a charm – and not that three strikes and they are out.
One minute after midnight Friday morning, EFH announced that it reached an agreement to sell its subsidiary, Oncor, to Berkshire Hathaway Energy for $18.1 billion.
Lawyers for Kirkland & Ellis, Jones Day and Gibson Dunn quietly worked on the mega-transaction for the past couple weeks after efforts by Florida-based NextEra Energy were blocked by the Texas Public Utility Commission.
EFH General Counsel Andy Wright led the legal team for EFH, which has been in bankruptcy since April 2014.
Kirkland & Ellis corporate M&A partners Andy Calder and John Pitts of Houston advised EFH.
Pat Villareal, a senior counsel at Jones Day in Dallas, has been a lead legal adviser for Oncor throughout the EFH bankruptcy. Lawyers in Gibson Dunn’s New York office are representing Berkshire Hathaway, though Dallas tax partner David Sinak is also advising.
“We are excited to begin the regulatory approval process as this transaction has significant support across our key stakeholders,” Nye said in a written statement.
Warren Buffett, in a press statement, said that Oncor is a “perfect fit” for Berkshire Hathaway.
“When we invest in Texas, we invest big,” Buffett said.
The Texas PUC rejection of two prior efforts by EFH to sell its 80 percent stake in Oncor had one major impact on the deal with Berkshire: It drove the price tag down an estimated $600 million.
The PUC denied NextEra’s attempt to buy Oncor, claiming that the energy company was too diverse and a NextEra bankruptcy would jeopardize the Oncor assets in Texas. Berkshire Hathaway is even more diverse in its business operations than NextEra.
Oncor is the largest regulated public utility in Texas serving an estimated 10 million residents through its power distribution lines.
“So much for Texas government officials making Texas open for business or more business friendly,” one lawyer close to the transaction told The Texas Lawbook.
The sale of Oncor would be the final step in the resolution of the $45 billion bankruptcy of EFH. Luminant and TXU Energy were spun-off under a separate holding company called Vistra Energy.
Kirkland represented EFH as debtors counsel throughout the 39-month process.
Other Kirkland lawyers based in Houston that are playing a prominent role in the transaction are corporate partner Veronica Nunn , corporate associates David Thompson, David Moore and Stella Tang.
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