Talen Montana Seeks to Clawback Alleged Fraudulent Transfers of $900 Million Made to Parent Companies
May 10, 2022, Bankruptcy Court for the Southern District of Texas – Talen Montana, LLC (“Talen Montana” f/k/a PPL Montana, LLC) as debtor-in-possession files an adversary complaint against PPL Corp. (“PPL”), PPL Capital Funding, Inc. (“PPL Capital Funding”) et al. (collectively “Defendants”) to avoid “fraudulent transfers” of nearly $900 million made to the Defendants, which were at the time PPL Montana’s parent companies.
The complaint makes allegations that Defendants “orchestrated” transfers knowing that PPL Montana faced hundreds of millions of dollars of liabilities and PPL Montana LLC’s remaining assets had no means to satisfy these liabilities. In November 2014, PPL Montana LLC allegedly sold its hydroelectric assets for approximately $900 million and distributed its proceeds among PPL Corp. and its subsidiaries. The complaint claims that this distribution constitutes a “fraudulent transfer, both actual and constructive”.
The complaint also maintains that by “extracting” this value from PPL Montana and “disregarding” PPL Montana’s substantial liabilities, Defendants rendered PPL Montana insolvent and unable to fund its significant obligations including the obligations to its creditors.
Talen Montana requested the Court to avoid and recover the Distribution as “actual fraudulent transfer” under 11 U.S.C. §§ 544(b), 550 and “constructive fraudulent transfer” under 11 U.S.C. §§ 544(b), 550.
Talen Montana, LLC v. PPL Corp., PPL Capital Funding, Inc., PPL Electric (In re Talen Energy Supply, LLC, et al.) AP No. 22-9001, Bankruptcy Court for the Southern District of Texas.