Transition Of Griddy’s Customers To TXU Retail Energy Constitutes a “Transfer”; Alleges Plan Administrator in Griddy Energy LLC Bankruptcy
February 14, 2022, Southern District of Texas – Plan Administrator Russell F. Nelms of Debtor Griddy Energy LLC brings a complaint against Defendant TXU Retail Energy Company LLC to recover alleged fraudulent transfers of customers under Section 548 of the Bankruptcy Code.
The complaint alleges that: As a retail electric provider (REP), Griddy sold electricity to customers in Texas at wholesale pass-through rates. TXU was also a holder of a REP certificate and had the authority to sell electricity to customers in Texas. In particular, the complaint contends that in February 2021, the Electric Reliability Council of Texas (ERCOT) revoked Griddy’s rights as a market participant due to its alleged breach of standard form market participant agreement and allegedly forced the mass transition of 9926 Griddy customers. Nelm further contends that of these 9926 customers, 2290 were allegedly received and accepted by TXU.
The complaint alleges that the transition of Griddy’s customers to TXU constitutes a “transfer” within the meaning of 11 USC 101(54) because Griddy was allegedly insolvent or became insolvent on the dates its customers were transferred to TXU, and Griddy allegedly received no consideration for the transfer of its customers to TXU. Nelms’ primary contention is that Griddy’s customers allegedly had value, and the transfer of Griddy’s customers to TXU for no value allegedly represented a transfer for less than reasonably equivalent value.
Accordingly, Nelm requests the Court to avoid the transfer of Griddy’s customers to Defendant under Section 548(a)(1)(B) and grant an order allowing the Plan Administrator to recover the value of the customers from the initial transferee of the transfer under Section 550(a) of the Bankruptcy Code.
In re: GRIDDY ENERGY LLC, Case No. 21-30923