Independent oil and gas operator Rosetta Resources Inc. filed an objection to Chapter 11-bound Calpine Corp.’s reorganization plan for emerging from bankruptcy. Rosetta, which purchased Calpine’s oil and natural gas reserves in 2005, has unresolved disputes with the independent power plant operator.
In the objection, Rosetta argued that the court should reject Calpine’s disclosure statement because it allegedly contains “misleading and factually inaccurate descriptions” of the July 2005 transaction in which Calpine split off its remaining oil and gas business to Rosetta, a Calpine-created entity, including the claims that Calpine subsequently has filed against Rosetta.
Rosetta said statements made in the court filing by Calpine amount to “little more than self-serving allegations that are improperly portrayed as facts rather than unsupported contentions that are disputed by Rosetta.”
The U.S. Bankruptcy Court of the Southern District of New York last Tuesday approved a partial settlement between Rosetta and Calpine Corp. On the same day, Rosetta asked the court to dismiss Calpine’s unsettled allegations of fraudulent actions by the producer (see Daily GPI, Sept. 14).
“We object to approval [by the bankruptcy court] of Calpine’s proposed disclosure statement because it contains false and misleading descriptions of the Rosetta transaction and the purported claims Calpine holds against Rosetta,” said Rosetta CEO Charles Chambers.
Rosetta contends that in its court filing Calpine does not disclose “the nature and extent” of any investigation it may have conducted before proposing to release claims that the Calpine bankruptcy estate may hold against Calpine’s board of directors, officers and professional advisers arising from their respective involvement in the “conception, structuring and implementation” of the Rosetta deal.
“At a minimum Calpine should provide additional disclosure of the nature and extent of the investigation it conducted,” Rosetta contends in its filing of objection.
While reiterating that Calpine’s outstanding claims against it are “entirely devoid of merit,” Rosetta said Calpine apparently is trying to use Chapter 11 bankruptcy protection to “effectively attempt to renegotiate the terms of the Rosetta’s acquisition of Calpine’s oil and gas business,” and in the process reap what Rosetta called a “monetary windfall for its shareholders.”
Among six other allegations by Rosetta, the Houston-based independent argued that the disclosure statement fails to inform creditors that full claims payment under Calpine’s plan does not depend on the power plant operator recovering claims against Rosetta, and does not address Rosetta’s contention that its purchase agreement with Calpine is comprised of “a number of interrelated agreements.”
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