UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 1, 2005
CALPINE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State or Other Jurisdiction of Incorporation)
Commission File Number: 001-12079
I.R.S. Employer Identification Number: 77-0212977
50 West San Fernando Street
San Jose, California 95113
Telephone: (408) 995-5115
(Address of principal executive offices and telephone number)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 8.01 -- OTHER EVENTS
On December 1, 2005, the Company issued a press release, attached as
Exhibit 99.1 hereto.
ITEM 9.01 -- FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits.
99.1 Press Release dated December 1, 2005.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CALPINE CORPORATION
By: /s/ Charles B. Clark, Jr.
-------------------------------------
Charles B. Clark, Jr.
Senior Vice President, Controller and
Chief Accounting Officer
Date: December 1, 2005
EXHIBIT INDEX
Exhibit Description
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99.1 Press release dated December 1, 2005
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EXHIBIT 99.1
NEWS RELEASE
Media Relations: Investor Relations:
Katherine Potter, 408-792-1168 Rick Barraza, 408-792-1125
kpotter@calpine.com rbarraza@calpine.com
Karen Bunton, 408-792-1121
kbunton@calpine.com
Calpine Provides Update Regarding Certain Litigation Matters
(SAN JOSE, Calif.) /PR Newswire - First Call/ Dec. 1, 2005 - Calpine
Corporation [NYSE:CPN] provided updates on the following litigation matters:
Natural Gas Sale Proceeds Litigation
On November 30, 2005, Calpine filed with the Delaware Chancery Court a
memorandum in response to the court's November 22, 2005 opinion in Calpine's
suit regarding the disposition of the proceeds from Calpine's July 2005 sale of
its natural gas assets (Opinion). In the Opinion, the court directed the parties
to make submissions regarding an appropriate restorative remedy relating to the
$313 million of sale proceeds released to Calpine by the collateral trustee. In
the memorandum, Calpine informed the court that, given the delay of the second
lien bondholders in asserting their rights, Calpine believes an appropriate
remedy would be the restoration of $199 million, plus accrued interest at a rate
of 3.5%, per annum to the collateral account or the use of that amount for
reinvestment in qualifying designated assets or repurchase of secured debt.
Calpine also requested that the court allow it a period of 90 days to restore
the funds. Wilmington Trust Company, in its capacity as trustee for the second
lien bondholders, requested that the court direct Calpine to restore $313
million in cash, plus interest at the Delaware statutory pre-judgment rate to
the collateral account, within the later of (i) one week from the entry of the
court's final judgment, and (ii) December 9, 2005.
Recent developments affecting the company, including the Opinion, have
undermined its ability to complete planned financial transactions to meet its
cash-flow requirements. Regardless of how the Court rules in this case, there is
a substantial risk that Calpine will not have sufficient cash to satisfy the
restorative remedy ordered by the court and its ongoing debt service obligations
and operating expenses. As a consequence, Calpine continues to evaluate its
options, including the possibility of filing for bankruptcy.
Harbert Contingent Convertible Notes Litigation
In a suit filed in the Supreme Court, New York County, State of New York,
Harbert Convertible Arbitrage Master Fund, Ltd. and related entities (Harbert),
holders of Calpine's 6% Contingent Convertible Notes due 2014 (Convertible
Notes), joined by Wilmington Trust Company, the trustee under the Indenture for
the Convertible Notes, acting on behalf of all holders of the Convertible Notes
(Trustee), contend that Calpine breached an obligation under the Convertible
Notes Indenture. Specifically, the plaintiffs allege that Calpine failed to
engage the Bid Solicitation Agent to determine the trading price of the
Convertible Notes after Harbert presented to Calpine what the plaintiffs assert
was reasonable evidence that the Trading Price (as defined by the Convertible
Notes Indenture) of the Notes was below 95% of parity in relation to the market
price of Calpine's common stock.
At a status conference on November 22, 2005, Calpine informed the court
that it continues to believe that there had been no default under the
Convertible Notes Indenture. However, in an effort to remove the uncertainty
raised by the claims in the litigation and by a purported default notice based
on the same assertions, Calpine has taken actions, which it believes have
effected a cure of the alleged default. In this regard, at the request of
Calpine, American Stock Transfer and Trust Company, the Bid Solicitation Agent
for the Convertible Notes, determined in accordance with the Convertible Notes
Indenture the Trading Price of the Convertible Notes at all of the relevant
times cited by Harbert and another holder in their purported notice of default.
Based on the Trading Prices determined by the Bid Solicitation Agent, Calpine
has calculated that at all relevant times the relationship of the Trading Price
of the Convertible Notes to the market price of Calpine's common stock was such
that the Convertible Notes did not become convertible under the terms of the
Convertible Notes Indenture.
While Calpine believes that it has at all times been in full compliance
with its obligations under the Convertible Notes Indenture, there is no
assurance that Harbert and the Trustee will not continue to press their claim
that Calpine has breached the Convertible Notes Indenture by failing to engage
on a timely basis the Bid Solicitation Agent, including by contending that
Calpine's cure of the alleged breach was ineffective. If it is determined that
Calpine has defaulted in its obligation under the Convertible Notes Indenture as
alleged by Harbert and the Trustee, and if such a default were found to be
material and not to have been cured, then all of the Convertible Notes would
become immediately due and payable at the election of the holders. Moreover,
such acceleration under the Convertible Notes Indenture would constitute a
default under other debt obligations of Calpine.
A major power company, Calpine Corporation supplies customers and
communities with electricity from clean, efficient, natural gas-fired and
geothermal power plants. Calpine owns, leases and operates integrated systems of
plants in 21 U.S. states and in three Canadian provinces and is building a plant
in Mexico. Calpine was founded in 1984. It is publicly traded on the New York
Stock Exchange under the symbol CPN. For more information, visit
http://www.calpine.com.
This news release discusses certain matters that may be considered
"forward-looking" statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended, including statements regarding the intent, belief or current
expectations of Calpine Corporation ("the Company") and its management.
Prospective investors are cautioned that any such forward-looking statements are
not guarantees of future performance and involve a number of risks and
uncertainties that could materially affect actual results including the risks
identified from time-to-time in the Company's reports and registration
statements filed with the SEC, including the risk factors identified in its
Annual Report on Form 10-K for the year ended December 31, 2004, and in its
Quarterly Report on Form 10-Q for the three months ended September 30, 2005,
which can also be found on the Company's website at www.calpine.com. All
information set forth in this news release is as of today's date, and the
Company undertakes no duty to update this information.