Talen Creditors Look to Unwind $848 Million Pre-Bankruptcy Loan

Unsecured creditors of Talen Energy Supply LLC sought permission to sue the company’s lenders over an allegedly exploitative $848 million loan that they say improperly inflated Talens secured liabilities just months before it filed for bankruptcy.

Talen’s entry into a “commodity accordion facility” in December of last year hindered the rights of lower-ranking creditors and their likelihood of recovering their debt holdings in bankruptcy, an official committee of unsecured creditors told the US Bankruptcy Court for the Southern District of Texas on Monday.

The committee asked the court for standing to bring a lawsuit that would invalidate purported liens and, ...