Bankruptcy

NOLA’s Entergy Emerges from Bankruptcy

The electric and gas utility devastated by Hurricane Katrina gains the court's approval to start over. In addition, a new chief accountant is appoi...
Stephen TaubMay 9, 2007

A federal judge cleared the final hurdle for Entergy New Orleans (ENO) to emerge from Chapter 11 bankruptcy. The Entergy Corp. subsidiary that serves Orleans Parish filed for bankruptcy protection in October 2005, after its grid was destroyed by Hurricane Katrina and it was left with few paying customers over the next several months. The parent company was not affected by the bankruptcy filing.

Creditors of ENO approved a bankruptcy reorganization plan on May 1. Under the plan, all creditors will be fully compensated and there will be no change to its work force of about 400 employees. To date, ENO has incurred more than $213 million in Hurricane Katrina storm restoration costs. In addition, the utility estimates that it will incur future costs of about $465 million related to storm restoration as it rebuilds its natural gas system.

Last week, ENO announced that it received a $171.7 million Community Development Block Grant (CDBG), to help rebuild the electric and gas systems that were destroyed by the Category 5 hurricane. The payout is the first installment of a potential $200 million grant awarded to the company to help it return to business without burdening customers with a rate increase.

In addition to CDBG assistance, Entergy Corp. recently settled with Hartford Steam Boiler Inspection and Insurance, a subsidiary of the AIG, for $69.5 million. ENO will receive approximately $53.7 million of the settlement amount for damage its facilities sustained.

Separately, the company announced personnel changes in its finance department. Nathan Langston, senior vice president and chief accounting officer, is retiring from Entergy in August 2007. Theodore Bunting will succeed Langston. Bunting was most recently vice president and chief financial officer of both Entergy’s utility and nuclear businesses. Following the 2005 storms, Bunting is credited with being a key contributor to ENO’s efforts to emerge from bankruptcy.

The company also said that Wanda Curry will succeed Bunting as vice president and CFO for nuclear operations. She will be responsible for accounting and financial activities of Entergy’s regulated and non-regulated nuclear function. Curry joined Entergy in 2002, as vice president, office of the chief risk officer, supporting commercial activity regarding the company’s overall commodity price exposure.

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