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[QUOTE]Originally posted by Jelly: [QB] WILMINGTON, Del., Dec 15 (Reuters) - Embattled power producer Calpine Corp. (CPNL.PK: Quote, Profile, Research) told the Delaware Supreme Court on Thursday that, if ordered to do so, it can repay $312 million that it misspent on fuel earlier than the Jan. 22 deadline imposed by a lower court. Calpine had previously said that it was not sure it could repay the money by the deadline and was at risk of bankruptcy. But the company's lawyers said on Thursday that Calpine could make good on the repayment and was also seeking to raise new funds. "(Calpine) is in the process of attempting to enter into financing transactions," said Robert Haney, an attorney for Calpine, at an appeals hearing before the court. "Obviously it's easier to do that in the longer term." The court statement by the Calpine attorney "suggests that the new management is not as inclined to file for bankruptcy," said Jon Cartwright, an analyst at BOSC Inc. The court heard arguments from Calpine, one of the biggest U.S. power generators, and Wilmington Trust (WL.N: Quote, Profile, Research) , as trustees for Calpine's first and second lien note holders. Calpine is appealing a Delaware Court of Chancery ruling that it violated terms of its debt by using $312 million in asset sale proceeds to buy gas for fuel, saying it should be reversed because the court misinterpreted the terms. The Chancery Court ordered Calpine to repay the money to the bank account from which it came in the first place, an account intended to be used only for the repayment of debt and the purchase of certain kinds of designated assets. Wilmington is asking the Supreme Court to uphold the Chancery Court's ruling and to accelerate Calpine's repayment to January 3. Wilmington agreed last week to hold off forcing Calpine to repay $3 billion in second-lien notes until the appeal is decided and a repayment deadline is confirmed. Wilmington said it wants the money sooner rather than later because then, "they won't be able to use the monies in that account for any other reason," attorney Laurence Greenwald said in court. The Supreme Court, after an hour-long hearing, adjourned and said it expected to rule on the appeals promptly. Even before the hearing, though, analysts said it did not matter in the long run if the court cut Calpine's time to repay the money. "The tightening of the time frame ... (is) clearly important but ... I don't think that time frame of 20 days is really going to be that meaningful," said Caesar Silvestro, an analyst at Samco Capital Markets. © Reuters 2005. All Rights Reserved. [/QB][/QUOTE]
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