A lawsuit was filed by a current investor in NYSE:DYN shares over alleged breaches of fiduciary duties in connection with the $1.7billion Refinancing and other current NYSE:DYN stockholders should contact the Shareholders Foundation.
San Diego, CA -- (SBWIRE) -- 05/22/2012 -- A current investor in NYSE:DYN shares filed a lawsuit against members of the board of directors of Dynegy Inc. in connection with the company’s $1.7billion asset transfer in an internal restructuring.
Investors who are a current long-term stockholders in NYSE:DYN shares, have certain options and should contact the Shareholders Foundation at mail(at)shareholdersfoundation.com or call +1(858) 779 - 1554.
The plaintiff alleges that defendants breached their fiduciary duties owed to shareholders failing to inform investors that one of Dynegy’ s wholly-owned subsidiaries fraudulently transferred ownership in an indirectly owned subsidiary directly to Dynegy Inc.
In September 2011, Dynegy Inc. announced that it has acquired direct ownership of Dynegy Coal Holdco, LLC, the indirect parent of Dynegy's subsidiary Dynegy Midwest Generation, LLC. Dynegy Inc. said that as announced in August 2011, Dynegy Inc. established Dynegy Midwest Generation, LLC as part of an internal restructuring designed to increase flexibility and optimize asset value by creating separate coal-fueled and gas-fueled power generation units, for which $1.7 billion in stand alone first lien financings were obtained.
Dynegy Inc. said the transfer of Dynegy Coal Holdco, LLC will help Dynegy Inc. delever its consolidated balance sheet by facilitating one or more potential transactions, which are currently under consideration by the Finance and Restructuring Committee of the Board.
In December 2011, Dynegy Inc. announced that Dynegy Inc. and Dynegy Holdings, LLC file proposed Chapter 11 Plan of reorganization for Dynegy Holdings, LLC
However, on March 9, 2012, the Chapter 11 examiner in the bankruptcy cases of Dynegy Holdings, LLC and its debtor affiliates issued a report. In the executive summary the examiner said, among other things, that he concluded that the conveyance of Dynegy Midwest Generation, LLC to Dynegy Inc. was an actual fraudulent transfer and, assuming that Dynegy Holdings was insolvent on the date of the transfer (approximately two months before the bankruptcy filing), a constructive fraudulent transfer, and a breach of fiduciary duty by the board of directors of Dynegy Holdings.
The plaintiff says that Dynegy executives failed to disclose that Dynegy Holdings was insolvent or on the brink of insolvency at the time of the transaction, that the value of the transaction was substantially less than $1.25 billion, and that the acquisition of the direct ownership of Coal Holdco was fraudulent.
Shares of Dynegy Inc. (NYSE:DYN) fell from as high as $6.64 per share on July 13, 2011 to as low as $0.32 per share on April 25, 2012 and closed on May 21, 2012 at $0.42 per share.
Those who are current long-term stockholders of NYSE:DYN shares, have certain options and should contact the Shareholders Foundation.
Shareholders Foundation, Inc.
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