Energy Future to hire additional directors prior to interest default vote - source

By Rizza Sta. Ana

Oct 30, 2013 05:47 AM EDT

Energy Future Holdings Corp reportedly hired two additional board directors recently, a source told Bloomberg. The hiring of new board directors appeared timely as the voting for making a crucial interest payment would be done this week.

Two people said that one of the new board directors was independent. The sources remained unidentified as the hiring process wasn't made public.

The power producer, formerly known as TXU Corp, would need to pay USD270 million in interest before November 1 this year. It is usual for directors of companies nearing bankruptcy to priorities creditors rather than shareholders. Senior lenders had been urging Energy Future to seek bankruptcy protection first prior to making coupon payments.

University of Michigan Ross School of Business Professor Erik Gordon said, "You want independent directors to sign off on those decisions. You don't want the decisions to be attacked as being self-interested rather than for the benefit of the company and its creditors."

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