Bloomberg News

J. Aron Threatens to Cancel LSP Energy Contract, Lawyer Says

February 14, 2012

(Updates with LSP attorney’s comment in second paragraph.)

Feb. 13 (Bloomberg) -- J. Aron & Co., the energy dealer owned by Goldman Sachs Group Inc., threatened to cancel its contract with LSP Energy LP because the electricity provider filed for bankruptcy, LSP’s lawyer said.

“We consider that a violation of the automatic stay,” the LSP attorney, Martin T. Fletcher, said today in U.S. Bankruptcy Court in Wilmington, Delaware, referring to the provision of the law that temporarily halts legal action against companies in bankruptcy.

J. Aron is one of two companies that buy electricity from LSP’s natural-gas fueled power plant in Batesville, Mississippi, LSP said in court papers. LSP filed for bankruptcy protection on Feb. 10 after an accident and a botched repair last year kept part of the plant offline since May.

LSP has lost about $19 million because of the disruption, the company said in court papers. LSP said it plans to finish repairs and sell the power plant while in bankruptcy. The sale should bring in enough money to pay all of the $211 million in long-term debt the company owes, LSP said.

Michael S. Duvally, a spokesman for New York-based Goldman Sachs, the fifth-biggest U.S. bank by assets, declined to comment on the LSP lawyer’s statement.

The case is In re LSP Energy Limited Partnership, 12-10460, U.S. Bankruptcy Court, District of Delaware (Wilmington).

--Editors: Stephen Farr, Andrew Dunn

To contact the reporter on this story: Steven Church in Wilmington at schurch3@bloomberg.net.

To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net.


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