Dynegy bankruptcy thrown into question

March 10, 2012 at 11:52 AM
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HOUSTON, March 10 (UPI) -- A court examiner reviewing Houston energy company Dynegy Holdings LLC's bankruptcy said its bankruptcy filing was preceded by a fraudulent asset maneuver.

Before Dynegy filed for reorganization, the company transferred "hundreds of millions of dollars away from Dynegy's creditors in favor of its stockholders," said bankruptcy court examiner Susheel Kirpalani.

The Wall Street Journal said that Kirpalani filed a 173-page report that says some members of the company board, including two directors set up by major shareholder Carl Icahn, were not aware the move to transfer assets to the company's parent Dynegy Inc., would move assets out of reach of the company's creditors, while protecting shareholders.

The report recommends that Icahn's two representatives remove themselves from the company board of directors. The report also puts the company's restructuring plans into question, the Journal said.

In a statement, Dynegy said it would "take the examiner's findings seriously and intend(s) to review the full report."

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