Kirkland Alert Kirkland & Ellis LLP

Bankruptcy Judge Rejects Claims Based on Loss of Note Conversion Rights

On August 8, 2007, in the Calpine bankruptcy case, U.S. Bankruptcy Judge Burton R. Lifland denied novel breach of contract claims asserted by holders of Calpine’s convertible notes. Allowance of these claims could have resulted in hundreds of millions of dollars in additional liabilities for the Calpine bankruptcy estate. This alert discusses this ruling and its impact on Calpine's plan of reorganization.