Energy Future files for Ch. 11 reorganization

DALLAS — Energy Future Holdings says it is filing for a Chapter 11 bankruptcy reorganization after reaching a deal with some key financial stakeholders to reduce its roughly $40 billion in debt.

The Dallas company says it will separate its Texas Competitive Electric Holdings subsidiary, which includes TXU Energy, and give preferred lenders all the ownership in that reorganized business. It also will give lenders cash proceeds from new debt in exchange for eliminating about $23 billion of Texas Competitive Holdings' funded debt.

Energy Future will still own Energy Future Intermediate Holding and keep its interest in Oncor Electric Delivery, which is not part of the reorganization.

Energy Future was acquired in 2007 by private-equity firms KKR & Co., TPG Capital and Goldman Sachs Capital Partners.