For more information contact:
Anthony Buxton
abuxton@preti.com

Maine Consumers Save Over $9 Million

Preti Flaherty, representing some of the largest electric consumers in Maine, has managed to cut the power costs to over 450 Maine businesses, including many large industrial plants, by over $9,000,000 through litigation related to the Enron bankruptcy. 

 
When Enron went into bankruptcy in December, many Maine customers were locked into expensive, long term power contracts with Enron.  These contracts were valuable to Enron.  Normally, these contracts could be freely sold by Enron in bankruptcy, and all actions to terminate them would be barred.

On behalf of the largest industrial users, Preti Flaherty filed a suit seeking to void the contracts for fraud.  In addition, using a little used provision of the Bankruptcy Code, Preti Flaherty sought to terminate the contracts, claiming they were “forward contracts,” like futures contracts, and argued that a special law let them be terminated.  In addition, when Enron sought to transfer all 550 contracts in Maine, PretiFlaherty fought against the transfer on behalf of all the customers. 

After months of litigation, Preti Flaherty achieved major price reductions in the power  costs in exchange for the customers’ consent to transfer to a new supplier. The result was a collective savings to Maine of over $9,000,000 in power costs.  The savings to one major employer alone was large enough to make a difference in any decision to keep open or close the facility.

This effort was led by Anthony Buxton, of Preti Flaherty’s Energy Group, and by John McVeigh, a bankruptcy attorney and litigator at Preti Flaherty.  “The litigation was difficult, intense, and complex.  The negotiations were even more difficult.  This deal makes Maine consumers one of the only groups in the country that got something good out of the Enron bankruptcy, ” Mr. McVeigh said.