Energy Future Paid Millions to Sidley Before Bankruptcy

New court papers show Sidley Austin LLP was the big earner among the professional firms grooming Energy Future Holdings Corp. as it headed toward a restructuring, raking in a $17.5 million retainer for representing the parent company that sits atop the beleaguered Texas power-selling conglomerate.

That’s almost three times the retainer claimed by Kirkland & Ellis LLP, which has taken the lead in bankruptcy-court action to date, absorbing $1.7 million of its $6 million retainer in the process. Sidley has tapped its retainer to the tune of $16.1 million, court papers show (see page 59).

Representatives of Sidley couldn’t be reached for comment Thursday afternoon. Energy Future’s spokesman declined comment.

Energy Future filed for Chapter 11 protection in April, with a partially prenegotiated restructuring that, in a very broad outline, would split the company in two and erase billions of dollars in debt, some of it by way of a debt-for-equity swap.

All in, Energy Future shelled out more than $28 million in retainers across thirteen firms that advised it in the run-up to the April 29 bankruptcy filing. Sidley is the stand-out, not just because of the size of its retainer, but also because it’s also one of the few  major bankruptcy law firm that  had not already shown up somewhere in Energy Future’s big bankruptcy.

The company has already revealed a list of professional bills it has agreed to pay, should its restructuring support agreement go into effect.  Those total $35 million, for lawyers and financial advisers for an array of creditors that negotiated with Energy Future about how to address its massive debts, the legacy of a 2007 buyout.

Assuming the restructuring support agreement is ultimately approved, Energy Future committed some $63 million to professional advice for itself and creditors before it ever filed a Chapter 11 petition.

Write to Peg Brickley at [email protected].