Entrust Energy, Inc.

MEET THE DEBTORS

There are 15 companies that are Debtors in the jointly administered bankruptcy cases related to Entrust Energy.

• Entrust Energy, Inc.
• Entrust Treasury Management Services, Inc.
• Entrust Energy East, Inc.
• Power of Texas Holdings, Inc.
• Knocked, Corp.
• Akyta Holdings, Inc.
• Enserve, Inc.
• Akyta, Inc.
• Energistics, Inc.
• SPH Investments, Inc.
• Akyta IP, Inc.
• Strategic Power Holdings, LLC
• NGAE, Inc.
• Surge Direct Sales, Inc.
• Entrust Energy Operations, Inc.

ENTRUST APPEARS TO HAVE SUBSTANTIAL FUNDS

Although we have yet to receive detailed financial information from Entrust Energy or its affiliated debtors, their initial filings do reveal some details about their finances. Specifically, Entrust has reported that it allegedly has $100-500 million in assets as compared to $50-100 million in liabilities. Yet, Entrust also states that it may owe the Electric Reliability Council of Texas, Inc., or ERCOT, as much as $270 million.

It looks like Entrust is banking on being able to defeat or substantially lower ERCOT’s claim in the bankruptcy proceeding. If that is true, it would be good news for Entrust’s other creditors.

Entrust has reported that on of its secured creditors, Shell, apparently owes Entrust in excess of $8 million. It has also filed a budget showing cash in excess of $24 million, which Entrust anticipates growing to over $38 million in the next month. Assuming these numbers are accurate, Entrust reports roughly $46 million in readily available cash. We have no accurate numbers on Entrust’s debt, but this amount of cash is a good sign for unsecured creditor repayment to some degree.

THE DEBTORS APPEAR TO WANT TO WIND DOWN

Entrust has been in the process of downsizing since at least 2019 in order to stay in compliance with its debt commitments with Shell. It has customers in Texas, Illinois, Maryland, New Jersey, New York, Ohio, and Pennsylvania. Yet, it was the historic Texas winter storm in February 2021 that forced it to seek a complete wind down. Despite that the storm did not affect the majority of states in which the Debtors operate, Shell unilaterally terminated its contracts with Entrust just one day into the Texas catastrophe.

Shell’s actions caused Entrust to immediately move to transition their customers to other energy providers. The Debtors were partially successful in this effort, closing a sale that generated $3.16 million in proceeds in early March 2021. Through the bankruptcy, Entrust has demonstrated an intention to continue its wind down efforts.

Creditors are always at risk in a wind down scenario, even when the Debtors appear to be in a good cash position. If you are an Entrust creditor, be sure to take action to protect yourself by filing a claim, staying abreast of the developments in the case, and asserting all of your rights.