Calpine declares bankruptcy, cites natural gas prices
{{date|December 22, 2005}}

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Electrical power generator {{w|Calpine Corporation}} declared {{w|bankruptcy}} on Tuesday. The [[San Jose, California|San Jose]], [[California]] based company filed for {{w|Chapter 11}} bankruptcy protection in [[U.S.]] Federal Court, to facilitate debt restructuring and to allow for normal operations to continue. Calpine has obtained secured debtor-in-possession financing from {{w|Deutsche Bank}} and {{w|Credit Suisse First Boston}} totaling $2 billion. The company announced that some of its {{w|Canada|Canadian}} subsidiaries would also file for creditor protection under the {{w|Companies' Creditors Arrangement Act}}. Calpine and its subsidiaries operate natural gas and geothermal electricity generating plants in 21 U.S. states and 3 Canadian provinces.

The recent rise in natural gas prices due to Hurricanes Rita and Katrina has pushed Calpine's cost significantly above the locked in selling price for its long-term contracts. Calpine has asked the court to void eight long term contracts, including a 20-year contract entered into with the State of California's Department of Water Resources and Pacific Gas and Electric Company in 2001.

The company received permission on December 21 from the Federal Bankruptcy Court for the Southern District of New York to use $500 million of its financing to continue operating and to keep paying its employees' salaries and benefits.

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==Sources==
*{{source|title=Calpine Corporation Files Chapter 11 Petitions to Facilitate Debt Restructuring |url=http://phx.corporate-ir.net/phoenix.zhtml?c=103361&p=irol-newsArticle&ID=798057&highlight= |author=|pub=Calpine Corporation|date=December 20, 2005}}
*{{source|title=Bankrupt Calpine Asks Court to Void Pacts  |url=http://www.chron.com/disp/story.mpl/ap/business/3542284.html|pub=The Associated Press|author=|date=December 22, 2005}}
*{{source|title=Calpine Receives Court Approval of First Day Motions |url=http://phx.corporate-ir.net/phoenix.zhtml?c=103361&p=irol-newsArticle&ID=798677&highlight= |
author=|pub=Calpine Corporation|date=December 22, 2005}}

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[[Category:Economy and business]]
[[Category:San Jose, California]]
[[Category:California]]
[[Category:United States]]
[[Category:North America]]
[[Category:Santa Clara County, California]]
[[Category:Bankruptcy]]
[[Category:Pacific Gas and Electric]]
Electrical power generator bankruptcy on Tuesday. The San Jose, California based company filed for Deutsche Bank and Canada|Canadian subsidiaries would also file for creditor protection under the . Calpine and its subsidiaries operate natural gas and geothermal electricity generating plants in 21 U.S. states and 3 Canadian provinces.

The recent rise in natural gas prices due to Hurricanes Rita and Katrina has pushed Calpine's cost significantly above the locked in selling price for its long-term contracts. Calpine has asked the court to void eight long term contracts, including a 20-year contract entered into with the State of California's Department of Water Resources and Pacific Gas and Electric Company in 2001.

The company received permission on December 21 from the Federal Bankruptcy Court for the Southern District of New York to use $500 million of its financing to continue operating and to keep paying its employees' salaries and benefits.
Economy and business San Jose, California California United States North America Santa Clara County, California Bankruptcy Pacific Gas and Electric