Merger to follow Dynergy bankruptcy

July 6, 2012 at 11:22 AM

POUGHKEEPSIE, N.Y., July 6 (UPI) -- Energy giant Dynergy Inc. said it filed for Chapter 11 bankruptcy in New York, with an agreement to merge with a subsidiary, Dynergy Holdings.

The company, based in Houston, said it filed bankruptcy in the United States Bank Court for the Southern District of New York, Poughkeepsie Division.

The filing allows it to restructure, which is part of a court-approved settlement in a case filed by creditors upset that the company assumed ownership of $1.25 billion in assets in the form of two coal-burning plants from Dynergy Holdings after the subsidiary filed for bankruptcy.

After the merger, creditors will hold 99 percent of the company, The New York Times reported.

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