NOTICE DATE:
July 7, 2010
NOTICE TYPE:
M-A070710-01 Legal
SHORT DESCRIPTION: Distribution of Collateral from Adversary
Proceeding Related to TCE Bankruptcy
INTENDED AUDIENCE: QSE Financial Personnel
DAY AFFECTED:
July 7, 2010
LONG
DESCRIPTION: On
May 13, 2010, the United States Court of Appeals for the Fifth Circuit (Fifth
Circuit Court) issued its opinion in the matter styled Cause No. 08-40890,
Electric Reliability Council of Texas, Inc. v. Leo Leonard May. This appeal
was a result of an Adversary Proceeding in the Texas Commercial Energy (TCE)
bankruptcy.
In short, the
Fifth Circuit Court concluded that Electric Reliability Council of Texas, Inc.
(ERCOT) was legally authorized to draw down on a $900,000 Letter of Credit
(LOC) that was posted as collateral under the ERCOT Protocols on behalf of TCE
when TCE defaulted on its Plan Debt after bankruptcy reorganization. As such,
the Fifth Circuit Court reversed and rendered judgment in favor of ERCOT.
Attached is a copy of the Fifth Circuit Opinion.
Since this
matter is officially closed, ERCOT is now prepared to distribute the collateral
plus accumulated interest ($900,000 collateral plus interest of $317,534.07 for
a total amount of $1,217,534.07) to certain Qualified Scheduling
Entities (QSEs) representing Load Serving Entities, on a Load Ratio Share (LRS)
basis, using the LRS for February 2005 to reimburse previously uplifted
amounts.
ADDITIONAL
INFORMATION:
The money will be paid to QSEs if they had a non-zero LRS as stated above.
Backup information will be provided to those entities receiving payment in the
“MISCELLANEOUS” folder on Texas Market Link (TML).
CONTACT: If you have any questions
regarding resolution of this matter, please contact the ERCOT Legal Department,
Chad V. Seely, Senior Corporate Counsel, at 512-225-7035 or via email at [log in to unmask].
For further
questions, please contact your ERCOT Account Manager. You may also call the
general ERCOT Client Relations phone number at (512) 248-3900 or contact ERCOT
Client Relations via email at [log in to unmask].
If you
are receiving email from an ERCOT distribution list that you no longer wish to
receive, please follow this link in order to unsubscribe from this list: http://lists.ercot.com.
dh