Marc Lipschultz, head of the Energy and Infrastructure unit of private equity giant KKR & Co, stepped down from the Energy Future Holdings Corp board of directors, Bloomberg reported. Energy Future Holdings is the largest power provider in Texas that is currently looking to restructure its debt amounting to $45.6 billion. 

Citing a biography from the website of KKR, the report said Lipschultz was instrumental in the 2007 leveraged buyout of the company formerly known as TXU Corp. That $48 billion deal was led by KKR, Goldman Sachs Capital Partners and TPG Capital. A filing with the US Securities and Exchange Commission showed that the he had been with the board of Energy Future Holdings since it was taken private and had informed KKR of his resignation on January 17, the report said.

The buyout was made on the expectation that the price of natural gas which determined the electricity price in Texas would continue to go up. However, prices declined with the advent of fracking or hydraulic fracturing which led to an increase in gas supplies in the US. This has caused 10 straight quarterly losses for the company beginning in 2011. The power producer is discussing with creditors to agree on a reorganization plan to be undertaken through a bankruptcy, the report said.

University of Michigan Ross School of Business Professor Erik Gordon told Bloomberg, "When you get into the zone of insolvency, the best thing is to have directors that are completely disinterested."

Energy Future Holdings Spokesperson Allan Koenig told the news agency that the company does not have immediate plans to get someone to replace Lipschultz whose resignation is in place effective immediately, the report said.

Citing the company's website, the report said two KKR executives still remain on the board of Energy Future Holdings after the resignation of Lipschultz. They are Jonathan Smidt and Brandon Freiman.