The ongoing struggles on the U.S. energy industry claimed another power provider this week as La Paloma Generating Co. LLC, which operators a natural gas-fired power plant in Southern California, filed for bankruptcy Tuesday in Delaware.
La Paloma, owned by Texas-based private equity firm Rockland Capital Energy, listed $524 million in debt in its Chapter 11 petition. The company operates a 1,200-megawatt combined cycle plant 110 miles northwest of Los Angeles in McKittrick, California.
O’Melveny & Myers global restructuring co-chairs George Davis and John Rapisardi, bankruptcy partner Peter Friedman and counsel Diana Perez and Andrew Sorkin are serving as lead counsel to La Paloma. Davis, Rapisardi, Friedman and Perez all joined O’Melveny three years ago from Cadwalader, Wickersham & Taft. (Davis and Rapisardi joined Cadwalader in 2007 from Weil, Gotshal & Manges.)
Curtis, Mallet-Prevost, Colt & Mosle is providing conflicts counsel to La Paloma, while Delaware’s Richards, Layton & Finger is serving as local counsel to the debtor. None of La Paloma’s outside legal advisers have yet filed billing statements with the bankruptcy court in Wilmington.
In court papers, La Paloma blamed slower-than-expected growth in electric energy demand, changes in the commodity markets and the growth of renewable energy resources in California as factors its bankruptcy filing. Since early 2015, more than 100 oil and gas companies in the U.S. and Canada have filed for bankruptcy, according to an analysis by Haynes and Boone.
A list of La Paloma’s 30 largest unsecured creditors shows that the Washington, D.C.-based company owes close to $200,000 to three Am Law 100 firms.
Bracewell, which adopted its current name earlier this year after the departure of former name partner Rudolph Giuliani, is listed as being owed $131,198.10 for legal services. Bracewell had previously advised Rockland Capital on its purchase of an equity interest in La Paloma in 2010, according to the firm’s website. In 2014, Bracewell also represented the energy provider in a challenge filed by the Sierra Club over an Environmental Protection Agency issued permit.
Court filings show that Greenberg Traurig is listed by La Paloma as being owed $44,110.10. The bankrupt energy provider also owes $12,910.53 to Paul Hastings. This past summer, La Paloma warned energy regulators that it could be forced to shut down due to the increased prevalence of renewable energy power.
Last month Portland, Oregon-based helicopter operator Erickson Inc., advised by Haynes and Boone, filed for bankruptcy in Dallas, citing a decline in business tied to the downturn in global oil exploration. On Dec. 1, Gardere Wynne Sewell took the lead for Houston-based Bennu Oil & Gas LLC on Chapter 7 filing in the same city.