TXU Corp. will write off $4.241 billion in obligations against failing subsidiary TXU Europe LLC, according to a pro forma financial filing 8-K with the Securities and Exchange Commission on Tuesday. The adjustments for the fourth quarter will include “anticipated obligations” to pull out of Europe, which totals about $3.611 billion to write off the European investment.

According to the filing, TXU Europe continues to retain: (a) its energy trading assets and liabilities; (b) several long-term power purchase agreements in the UK; (c) operations in Germany consisting of a national retail energy provider with 200,000 customers, as well as majority interests in two businesses providing power, gas, heating and water services: the city utility in Kiel (51% owned) with 250,000 customers and the city utility in Braunschweig (74.9% owned) with 210,000 customers; (d) operations in Scandinavia consisting of an 80% owned wholesale power business in Finland, selling over 4 TWh annually, a 45% interest in an electricity distribution business in Finland with access to 90,000 customers and a retail energy business with 80,000 customers in Norway; and (e) two UK plants and interests in various renewable energy projects, mostly wind farms.

Although the European units have not entered into formal UK administration (similar to U.S. bankruptcy proceedings), the remaining operations currently are being managed by the TXU Europe directors “for the benefit of the creditors.” The sales proceeds, said TXU, “will not be available” to the corporate parent.

According to Reuters, UK-based RWE AG’s Innogy Holdings unit has asked London’s High Court for a “winding up” order, which is similar to forcing a company into bankruptcy proceedings in the United States (The United Kingdom does not have bankruptcy laws). Innogy is attempting to recover some of the costs it claims to be owed by TXU Europe. Apparently, TXU Europe missed a bond interest payment Oct. 15, and was given a 30-day grace period before it is in default.

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