Griddy Energy’s customers, who paid exorbitant amounts for electricity during the Texas freeze last month, now have a formal seat at the table on the company’s bankruptcy.
The US trustee in the Griddy bankruptcy proceedings named three former Griddy clients to head the creditors’ committee and named the lead plaintiff on Thursday a proposed class action lawsuit against Griddy, Lisa Khoury, chair of the formal group.
It is a unique position for customers to be named as creditors in the event of bankruptcy, but the circumstances that have happened since temperatures dropped below freezing and the Texas power grid nearly collapsed during a week in February are not commonplace .
The episode left Griddy an unpaid $ 29.1 million due invoices into the system of the Texan network operator ERCOT and forced the company into bankruptcy On March 15.
US bankruptcy judge Marvin Isgur reminded Khoury during a hearing in Houston on Friday that the creditors’ committee has a fiduciary duty to represent other creditors in the case.
Among them is ERCOT, the company’s largest creditor, to whom the $ 29 million is owed. Others include transmission line operators CenterPoint Energy and Oncor Electric, to which Griddy owes about $ 1.2 million each.
“We are aware of our responsibility,” said Khoury, who claims her electricity bill was $ 9,340 from Feb 13-19, compared to her normal monthly bill of $ 200-250.
But while Griddy was 29,000. is The company announced in its filing for customers who have just gone bankrupt that it only has $ 3 million left. Griddy didn’t say how much it raised from customers before the end of the wild week of wholesale prices. Companies paid by Griddy can end up paying back Griddy’s customer. That could take additional lawsuits and a lot of time.
The 29 million US dollars that ERCOT is owed are supposed to wiped out following a proposal negotiated by Texas Attorney General Ken Paxton on behalf of Griddy customers as part of the bankruptcy of the Houston-based company. The attorney general agreed to close a fraudulent trade case against Griddy, but the bankruptcy court has not yet formally approved the agreement. The creditors’ committee must also agree to this.
The thousands of Griddy customers can now vote on Griddy’s bankruptcy plan. The court sent them notices this week asking them to check for future emails and open them.
For some customers, the deal could be a neat escape from the uncertainty they have faced over the past six weeks because they opted for a plan that they said saved them money. That was true until state supervisory authorities Wholesale prices were raised to a maximum of $ 9,000 per megawatt during the storm, which they believed was necessary to keep the grid running.
Most Griddy customers both have unpaid credits They want the Attorney General’s proposal to be forgiven and the money they’d like to get back. Many customers had money withdrawn from their accounts for the oversized bills because they couldn’t cut off Griddy’s automatic withdrawals from their credit cards and checking accounts.
Some believe Griddy was able to collect tens of millions of dollars from customers’ accounts during that time.
The money went somewhere and lawyers are looking for it.
Griddy is a pass-through company on the Texas unregulated power grid. It’s a retail electricity provider, a marketing company that develops plans to attract consumers and then buys electricity for them.
“Griddy raised a lot of money during the storm and sent it to ERCOT,” said Derek Potts, a Houston attorney who filed the class action lawsuit that is now part of Griddy’s bankruptcy. “ERCOT paid generators and others the money from Griddy. We are looking for it for these customers. “
What the note to customers said
Here is the text of the court-approved notice sent to Griddy’s customers:
TO FORMER CUSTOMERS * OF GRID ENERGY:
DISCLOSURE OF THE GROUP DOCUMENTS
On March 15, 2021, Griddy Energy LLC (“Griddy”) filed for bankruptcy. The judge in charge of the case is the Honorable Marvin Isgur of the United States Bankruptcy Court for the Southern District of Texas. He appointed Stretto.com as an administrator who sends you important notices about the bankruptcy.
All future notices of Griddy bankruptcy and any rights you may have will be sent to you by email (or SMS if Griddy has a valid phone number for you and does not have your correct email address).
TO PROTECT YOUR RIGHTS THAT YOU HAVE AS A FORMER GRIDDY CUSTOMER, IT IS IMPORTANT THAT YOU OPEN AND READ ALL E-MAILS, INCLUDING LINKS TO DOCUMENTS INCLUDED IN E-MAILS FROM: “GRIDDY [email protected] “.
The court has set July 19, 2021 at 5:00 p.m. (Central Time) as the last date for former customers * to file claims against Griddy in the bankruptcy court. If you are a past customer and you believe you have a claim against Griddy that arose prior to March 15, 2021, you must complete and submit a Proof of Claim form according to the instructions emailed to you by “GRIDDY ENERGY on behalf from noreply “received @ stretto.com.”
If you fail to file a lawsuit before the deadline, your action may be statute barred under a future order from the court. If you have any questions or need to provide the administrator with your updated and correct email address or phone number, please email: [email protected] or call toll free: 855.478.2725.
Information on Griddy’s bankruptcy is also available at: https://cases.stretto.com/Griddy.
* You are a “Former Customer” if you (a) are an individual who was a retail electricity customer (or the legal representative of such customer) of Griddy between February 11, 2021 and February 19, 2021, and (b) Hold a claim of any kind against Griddy that arose during or relates to the period from 02/11/2021 to 02/19/2021.