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Date: Fri, 16 Mar 2001 09:01:51 -0600 From: "Tracey Bradley" <tbradley@bracepatt.com< To: "Paul Fox" <pfox@bracepatt.com< Cc: "Alfredo Perez" <aperez@bracepatt.com<, "Jeffrey Watkiss" <dwatkiss@bracepatt.com<, "Mark Evans" <mevans@bracepatt.com<, "Ronald Carroll" <rcarroll@bracepatt.com< Subject: AP - Edison Creditor Secures Plant Lien Mime-Version: 1.0 Content-Type: text/plain; charset=US-ASCII Content-Disposition: inline Thursday March 15, 9:14 pm Eastern Time Edison Creditor Secures Plant Lien By LESLIE GORNSTEIN AP Business Writer LOS ANGELES (AP) -- Breaking away from a pack of creditors owed billions by Southern California Edison, Caithness Energy got permission Wednesday to secure a lien against one of the utility's plants. The judgment lets the New York-based electricity supplier to attach a partial claim on an Edison facility in Laughlin, Nev. -- a move that could spur bigger creditors to launch similarly aggressive approaches or even force Edison into bankruptcy. Caithness, which has two Nevada plants owed $20 million by Edison, was allowed to attach the lien by U.S. District Judge Lloyd George of Las Vegas. Once it becomes final in the next few days, the claim will be the first lien successfully placed against an Edison asset since California's energy crisis began last year. An Edison spokesman said the utility will seek a stay of the order next week. A lien allows a creditor a better chance of getting paid by laying claim to all or a portion of any future sale of a property. The judge allowed Caithness to file for a 56 percent interest in the plant, which employs 309 people and is valued at $530 million. The energy was used by Edison to feed California's energy grid, Caithness attorney Philip Korologos said Thursday. Edison owes Caithness a total of $100 million, and another $20 million bill will come due at the end of March, Korologos said. ``They took delivery of the power and they are supposed to pay us for the power,'' Korologos said. But whether Caithness will go after Edison's California assets is far from certain. Korologos said he believed that some form of additional mediation is required for California liens that might make such an option less attractive in the utility's home state. Edison's bigger creditors, including Reliant Energy of Houston, declined to speculate on whether they will employ a similar tactic. But industry experts said that the Caithness move could cause other, bigger creditors to feel pressure to act more aggressively on behalf of shareholders. The law requires only three major creditors to band together to force Edison into involuntary bankruptcy; the utility has said it does not intend to file on its own. So far, most creditors have chosen to simply wait, or ``forbear,'' on the Edison debts, having fielded repeated pleas by Edison to do so. At least four creditors or groups of creditors have sued the utility for money owed but have taken no further action. A New York-based creditor last month unsuccessfully tried to attach a lien to an Edison bank account without success, an Edison spokesman said. Edison's problems began last year when, under California's 1996 deregulation law, investor-owned utilities were forced to buy power on the soaring spot market while limiting the rates they could charge consumers. Edison and fellow utility Pacific Gas & Electric say they owe creditors a combined $14 billion.
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