UNITED STATES BANKRUPTCY COURT 

SOUTHERN DISTRICT OF FLORIDA 

FORT LAUDERDALE DIVISION 

www.flmb.uscourts.gov

In re: Chapter 11 

LIBERTY POWER HOLDINGS, LLC, Case No. 21-13797-PDR 

 Debtor. 

______________________________/ 

DECLARATION OF BOB BUTLER, PROPOSED CHIEF RESTRUCTURING 

OFFICER OF THE DEBTOR, IN SUPPORT OF 

CHAPTER 11 PETITION AND FIRST DAY MOTIONS

I, Bob Butler, pursuant to 28 U.S.C. § 1746, hereby declare under penalty of perjury that 

the following is true to the best of my knowledge, information and belief: 

1. I am the proposed Chief Restructuring Officer (the “CRO”) of Liberty Power 

Holdings, LLC (the “Debtor” or “Holdings”). I have served in my current role since being 

engaged on April 16, 2021. The Debtor plans to promptly submit a motion seeking an order 

approving my retention as CRO along with Berkeley Research Group, LLC (“BRG”) to provide 

financial and restructuring advisory services to me as CRO. I am a Managing Director of BRG 

in Atlanta, Georgia and have almost 20 years of experience in the insolvency and restructuring 

field and 40 years of business experience. BRG is a global consulting firm with offices around the 

world, specializing in, among other things, insolvency and restructuring matters, disputes and 

investigations, corporate finance, and performance improvement. I hold a Bachelor of Science 

degree in Accounting from the University of Arizona. I am a Certified Public Accountant and a 

member of the American Institute of Certified Public Accountants 

2. On April 20, 2020 (the “Petition Date”), the Debtor filed in this Court a voluntary 

case under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”). I submit this 

declaration (this “Declaration”) in support of the Debtor’s voluntary petition for relief and 

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certain motions filed concurrently herewith and which I anticipate the Debtor will file shortly (the 

“First Day Declaration”). I am authorized to submit this Declaration on behalf of the Debtor.

3. Except as otherwise indicated, the facts set forth in this Declaration are based upon 

my personal knowledge, my review of relevant documents, information provided to me by various 

sources, my opinion based upon experience, knowledge and information concerning the Debtor’s 

operations and financial condition, or my discussions with the Debtor’s advisors. If called upon 

to testify, I would testify competently to the facts set forth in this Declaration. 

4. This Declaration has been organized into four sections. The first section provides 

an overview of the Debtor and its business. The second summarizes the Debtor’s organizational 

and capital structure. The third describes the events leading to the filing of this chapter 11 case 

and the objectives of this case. The fourth section summarizes the relief requested in, and the 

legal and factual bases supporting, the “first day” motions and applications the Debtor has filed 

and expects to file with this Court (the “First Day Motions”).

I. THE DEBTOR’S BUSINESS 

5. Holdings is a retail energy provider (an “REP”) that is active in competitive 

electricity markets in over a dozen jurisdictions operating in five organized markets. Specifically, 

Holdings and its subsidiaries are certified and licensed to provide retail electric service by the 

Public Utilities Commissions or Public Service Commissions in each of California, Connecticut, 

District of Columbia, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, New Jersey, 

New York, Ohio, Pennsylvania, Rhode Island, Texas and Virginia. Holdings currently services 

hundreds of thousands of customer accounts in 14 states 

6. Holdings operates a relatively simple business model in concept, but a very 

complicated one in execution. In general, Holdings sells electricity to residential, commercial and 

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industrial customers, wherein it competes in price and terms with other REPs and the public utility 

in a given market area. Holdings typically makes a profit in the form of a margin between the 

price it charges a customer under a sales contract for electricity and the cost at which Holdings 

sources such electricity in the wholesale markets. However, that margin must also account for the 

costs associated with hedging, financing, and commercial operating expenses, among other things. 

7. Holdings’ business is credit intensive. This feature is a function of how power is 

ultimately consumed and secured in organized markets. Each organized market is operated by an 

independent system operator (each, an “ISO”), including the Electric Reliability Council of Texas 

(“ERCOT”), Pennsylvania, Jersey Maryland Power Pool (“PJM”), New York ISO, or ISO-New 

England. As Holdings’ customers consume electricity, each ISO balances that consumption with 

generation, and this balancing is treated as a purchase by Holdings in the wholesale markets and a 

resale to the customer. Typically, on a monthly basis, the ISO settles accounts and, in doing so, 

invoices Holdings for the power collectively consumed by its customers as a purchase in the 

wholesale market. Because the ISO is effectively taking counterparty credit exposure to Holdings 

as any month progresses, the ISO demands that Holdings provide it with credit assurance. 

Holdings funding and capital is provided by Boston Energy Trading and Marketing LLC 

(“BETM”) pursuant to a secured credit facility described in more detail below. 

8. The Debtor’s ultimate parent company, Liberty Power Corp, LLC (“ParentCo”), 

provided management and operating services seven (7) days a week to Holdings pursuant to the 

terms of that certain Management Services Agreement, dated as of August 8, 2006, as amended 

by First Amendment to Management Services Agreement, dated January 27, 2009, and as further 

amended by the Amended and Restated Management Services Agreement, dated January 27, 2014, 

and by the Second Amended and Restated Management Services Agreement dated as of July 6, 

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2020 (the “Management Agreement”). As such, Holdings relied on ParentCo to be able to conduct 

its business, manage customers’ accounts, deal with regulatory matters and perform other critical 

business operations on a daily basis. ParentCo employed in excess of 80 employees in order to 

provide these management services to Holdings. Pursuant to the Management Agreement, 

Holdings provided the funding to ParentCo on a weekly basis in order to cover the actual expenses 

incurred by ParentCo in providing the Management Services. 

II. CORPORATE AND CAPITAL STRUCTURE 

A. Corporate Structure 

9. The Debtor is a limited liability company duly organized under the laws of the State 

of Delaware. As set forth on the attached corporate organizational chart, Holdings is a whollyowned subsidiary of Liberty Power Super Holdings, LLC, which in turn is a wholly owned 

subsidiary of ParentCo. Holdings in turn owns and holds 100% of the outstanding membership 

interests in each of three subsidiaries, namely LPT, LLC, a Delaware limited liability company 

(authorized to do business in Texas as LPT SP, LLC) (“LPT”), Liberty Power Maryland LLC, a 

Delaware limited liability company (“LPMD”) and Liberty Power District of Columbia LLC, a 

Delaware limited liability company (“LPDC”). 

10. Holdings was founded in 2001 by David Hernandez, CEO (“Hernandez”) and 

Alberto Daire, President (“Daire”). On or about September 15, 2020, ParentCo appointed Derik 

Viner (“Viner”) as President of Holdings. 

11. Holdings’ principal place of business is located at 2100 West Cypress Creek Road, 

Suite 130 Ft. Lauderdale, Florida 33309 (“Corporate Office”). ParentCo’s principal place of 

business is located at the same address as the Debtor. 

12. In July 2020, Holdings completed a restructuring of its capital structure and 

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transitioned its wholesale energy supply arrangement from Shell Energy North America (US), L.P 

(“Shell Energy”) to BETM. In that transaction, Shell agreed to take a third-tier note in lieu of 

outstanding debt that Holdings owed to Shell at that time in the amount of $63,492,663 (the “Shell 

Loan”). In addition, Hernandez and Mr. Martin Halpern provided Holdings with a $10 million 

second-tier mezzanine loan (the “Mezzanine Loan”). 

13. In connection with the foregoing, BETM and Holdings entered into several 

documents to establish this facility including: 

(i) that certain Supply and Services Agreement, dated as of July 6, 2020 (as modified 

and supplemented and in effect from time to time, the “Supply Agreement”), between BETM and 

Holdings; 

(ii) that certain ISDA 2002 Master Agreement, the Schedule and all annexes thereto 

(including the Credit Support Annex and any Confirmations thereunder), dated as of July 6, 2020, 

by and between BETM and Holdings (the “ISDA Agreement” and, together with the Supply 

Agreement, the “Trading Documents”), and 

(iii) Pledge and Security Agreement, dated as of July 6, 2020 (the “Pledge Agreement”), 

by and among LPDC, MPMD, LPT, Liberty Power Super Holdings LLC (collectively, “Other 

Pledgors” and, together with Debtor, “Pledgors”), Holdings and BETM. 

 14. The Supply and Services Agreement is the central document in the supply facility 

between the Debtor and BETM. Under the Supply and Services Agreement, BETM provides, 

among others, the following services to the Debtor: 

(i) Provision of credit support to the ISOs and other key service providers or 

regulators for the operation of an REP like the Debtor; 

(ii) Provides hedges, either as financial instruments (e.g., a fixed/float swap) 

or as physical trades (e.g., selling power to the REP in the wholesale market); 

(iii) Working capital in the form of payment provisions that, among other 

things, bridges the gap between when the REP collects invoices from its customers and 

when the REP must pay the ISO, and allow certain amounts above in excess of available 

funds to be deferred to following month; 

(iv) Access to third-party sellers in the wholesale markets and or financial 

hedge provider through intermediation trades; and 

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(v) Supports the REP through various operational services, like risk 

management and scheduling. 

 15. Under the Supply and Services Agreement, BETM extended credit to Holdings 

based upon a borrowing base, subject to a cap of $40,000,000. So long as the amount of credit 

extended to Holdings was less than the borrowing base amount and the cap, then BETM could 

extend additional credit to Holdings, such as rolling an amount due to the next payment period. 

However, extensions of credit were subject to certain conditions, and certain transactions required 

the consent of BETM, such as when the principals entered into a derivative to hedge Holdings’ 

exposure to commodity prices, principally the price of electricity in an organized market. 

16. BETM provides a unique form of credit support to the ISOs in order to support 

Holdings’ activities. In essence, BETM provided a guaranty to each ISO for payments due to the 

ISOs in respect of electricity that Holdings’ customers consumed. In addition, BETM provided 

collateral to the ISOs in order to secure Holdings’ payment obligation prior to any settlement cycle 

(this financial support is known as “ISO Credit Support”). 

 17. BETM and Holdings also executed certain physical transactions for energy and 

financial derivatives under the ISDA Master Agreement. Under the Pledge Agreement, Holdings 

and the Pledgors granted BETM a security interest in certain collateral in order to secure certain 

obligations under the Pledge Agreement, the Trading Documents, and certain other transaction 

documents executed by the parties. More specifically, BETM holds a perfected, first-priority lien 

on substantially all of the assets of Holdings and its subsidiaries, and a perfected first-priority lien 

on all of the equity interests of Holdings. 

III. EVENTS LEADING TO CHAPTER 11 FILING 

A. North American Winter Storm Uri 

18. On February 14 and 15, 2021, Winter Storm Uri dropped prolific amounts of snow 

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across Texas and Oklahoma. Because of this winter storm and a concurrent cold wave, power 

grids—which were unable to sustain the higher-than-normal energy and heating demand from 

residential and business customers—failed across the Texas. At the peak of the outages, at least 

4.5 million Texas residents were left without electricity. The available power generation in the 

area failed to perform and the power grid nearly collapsed. Two of the electricity reliability 

commissions servicing the Southern U.S., the Southwest Power Pool (SPP) and the Electric 

Reliability Council of Texas (ERCOT), ordered rolling blackouts amid the frigid temperatures, in 

an attempt to manage the strain on the power grid and prevent widespread, long-duration 

blackouts. The controlled outages were initiated after the Southwest Power Pool declared Level 3 

Emergency Energy Alerts on both February 15 and 16. At one point during the rolling outages, 

over 4.2 million people across the south-central states were left without power, with over 3.5 

million of them in Texas alone. 

19. The impact of Winter Storm Uri caused a spike in wholesale prices for electricity. 

ERCOT set wholesale energy and ancillary services prices at stratospheric and unprecedented 

levels, creating a “perfect storm” of conditions that were impossible for Holdings and other market 

participants to anticipate or prepare for. These events, in turn, resulted in the Debtor incurring a 

financial charge from ERCOT that was well beyond its capability to pay. In fact, such charge was 

larger than the amount of credit that BETM would have provided otherwise to Holdings under the 

Supply and Services Agreement. Primarily because of this storm event, Holdings became unable 

to pay its debts when due and had liabilities in excess of its assets. Many other retail electric 

providers, municipalities and cooperatives have suffered similarly to Holdings and are facing 

similar financial challenges as a result of this situation. 

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B. Notice of Default By BETM 

 20. On March 26, 2021, BETM provided Holdings with a Notice of Potential Event of 

Default for Failure to Pay (the “Potential Event of Default Notice”). In the Potential Event of 

Default Notice, BETM advised Holdings that BETM’s invoice dated February 22, 2021 (the 

“February Invoice”) in the amount of $85,908,252.15 had not been paid in full and that Holdings 

continued to owe BETM $81,284,305 (the “Unpaid Amount”). BETM notified Holdings that its 

failure to pay to BETM the Unpaid Amount by March 31, 2021 would constitute an Event of 

Default under the Supply and Services Agreement. Holdings failed to pay the Unpaid Amount. 

On March 31, 2021, BETM provided Holdings with a Notice of Event of Default. 

21. Following a protracted set of negotiations in which BETM and Holdings were 

unable to agree on the terms of a forbearance, BETM terminated the supply facility by notice to 

Holdings on Monday, April 12, 2021. Even though BETM terminated its obligations under the 

Transaction Documents, BETM did not and has not withdrawn the ISO Credit Support, despite 

being entitled to do so. The continued ISO Credit Support has allowed Holdings to continue its 

retail operations to date despite the pendency of the default. 

C. Reconstitution of Board of Managers and Retention of Chief Restructuring 

Officer. 

22. On or about April 15, 2021, BETM exercised certain of its rights and remedies 

under the Pledge Agreement and, among other things, reconstituted the Board of Managers of 

Holdings. Thereafter, on April 16, 2021, the newly constituted Board of Managers of Holdings 

held a meeting and engaged me as CRO to provide certain financial advisory and restructuring 

services to Holdings. 

23. Over the weekend of April 16th and 17th, I took immediate steps to assess the 

situation and the status of the Debtor’s operations with the intent of communicating with ParentCo 

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first thing Monday morning to coordinate the continued provision of management services. I also 

engaged in discussions with BETM to confirm BETM’s agreement and willingness to provide 

funding to ParentCo to continue providing services to the Debtor under and through the 

Management Agreement. 

D. Termination of Employees 

24. On Sunday evening April 18, 2021, ParentCo, under the direction of Messrs. Viner 

and Hernandez, took precipitous action to terminate all of ParentCo’s approximately 80+ 

employees effective immediately, thereby placing the entire business operation and going concern 

value of the Debtor in serious jeopardy. ParentCo’s action was taken notwithstanding the 

commitment made by BETM to fund ParentCo’ s payroll for the next two (2) week period through 

April 30, 2021. 

25. The termination of ParentCo’s employees was communicated to counsel to the 

Debtor in the morning of April 19, 2021 via email. No attempt was made to discuss such 

termination of employees with me or counsel prior to taking this serious and damaging action. 

News of the employee termination was immediately leaked and disseminated to various media 

sources, causing more harm to the Debtor. 

26. Immediately upon learning of the termination, I attempted to negotiate a solution 

that would include immediately rehiring the employees and granting me and my team access to 

the Debtor’s books, records, systems and processes that were in the possession and control of 

ParentCo. ParentCo refused to cooperate with my request for access. Additionally, I directed 

counsel to make demand on ParentCo, its management, owners, professionals and employees to 

preserve any and all books and records in their possession, custody or control involving or related 

in any way to the Debtor, including without limitation all financial records (and related servers) 

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and all emails (and related servers). To date, no response nor access has been provided to the 

Debtor or access to the corporate premises. 

27. Faced with the lack of management services from ParentCo due to the termination 

of all of its employees and a refusal by ParentCo to provide access to the Debtor’s books, records, 

systems and processes, the Debtor was forced to file the within Chapter 11 proceedings to preserve 

and protect the going concern value of the Debtor for the benefit of all of its stakeholders. 

28. Since being advised of the termination of ParentCo’s employees on Monday 

morning, April 19, 2021, I have attempted to resolve the issues with ParentCo without success. 

Moreover, the ParentCo has refused to cooperate with and has imposed unacceptable conditions 

in regards to the Debtor‘s requests for turnover of the Debtors’ books and records and access to 

the corporate premises at which the Debtor’s operations were conducted. 

29. Given the drastic measures taken by ParentCo in terminating all of the employees 

and its failure to cooperate with the Debtor, emergency relief is being sought to compel turnover 

of the Debtor’s books, records, systems and processes to as to enable the CRO to try to preserve 

and protect and value of the Debtor’s business for the benefit of all of its stakeholders. 

IV. First Day Motions 

30. The First Day Motions seek relief to allow the Debtor to meet necessary obligations 

and fulfill its duties as a debtor in possession. I am familiar with the contents of each First Day 

Motion and believe that the relief sought in each First Day Declaration is narrowly tailored to 

continue the Debtor’s operations to the extent necessary to permit it to orderly and efficiently wind 

down in chapter 11, maximize value and the relief sought in the best interest of the Debtor’s estate 

and creditors’ interest. The facts set forth in each First Day Motion are incorporated herein by 

reference. Capitalized terms used but not otherwise defined in this section of this Declaration shall 

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have the meanings given to them in the relevant First Day Motions. Below is an overview of each 

of the First Day Motions. 

A. Operations-Related Motions

   

1. Debtor’s Emergency Motion To Compel (I) Turnover Of Debtor’s Books, 

Records, Systems And Processes Related to the Debtor and it Operations In 

the Possession and Control Of Liberty Power Corp, LLC, (II) Access To 

Corporate Premises, and (III) For Related Relief (“Turnover Motion”) 

31. Under the Turnover Motion, the Debtor respectfully requests entry of an order of 

the Court compelling (i) ParentCo and its principals to immediately turnover all books, records, 

systems and processes of and related to the operation of the Debtor’s business (the “Books and 

Records”), (ii) ParentCo to provide the Debtor, through me, immediate access to the corporate 

premises under the control of ParentCo at which the Debtor’s operations are conducted, (iii) 

ParentCo to cooperate and comply with any and all other reasonable requests of the Debtor 

(through me as CRO) for documents and information necessary for the Debtor to continue its 

operations and comply with its obligations under the Bankruptcy Code, and (iv) ParentCo and all 

principals of and persons in control of ParentCo to comply with the automatic stay under section 

362(a) of the Bankruptcy Code, including preventing ParentCo and its principals from taking any 

action against property of the Debtor’s estate.

32. I believe that the relief requested in the Turnover Motion is critical and in the best 

interests of the Debtor, its estate and its creditors, and will make the Debtor’s transition into chapter 

11 smoother, less costly and more orderly. Accordingly, on behalf of the Debtor, I respectfully 

submit that the Turnover Motion should be approved. 

2. Debtor’s Emergency Motion For Entry of Interim and Final Orders (I) 

Authorizing Debtor to (A) Obtain Postpetition Financing Pursuant To 11 

U.S.C. §§ 105, 361, 362, And 364, and (B) Use Cash Collateral and Grant 

Adequate Protection In Connection Therewith Pursuant To 11 U.S.C. §§ 361 

And 507, and (III) Scheduling A Final Hearing Under Bankruptcy Rule 4001 

(the “Cash Collateral Motion”). 

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33. I am in the process of negotiating the final terms of the use of cash collateral and 

the provision of DIP Financing from BETM. Due to the emergency nature of the filing of this 

Chapter 11 case, those terms were not able to be finalized in advance. BETM has advised me that 

they intend to allow the Debtor to use cash collateral and that BETM intends to support the credit 

support and other related needs of the Debtor in order to enable the Debtor to (a) continue the dayto-day operation of its business; (b) fund the expenses necessary to preserve the value of it business 

operations; and (c) fund this chapter 11 case. 

 34. As soon as the terms of the Cash Collateral Motion are finalized, I will direct 

counsel to the Debtor to bring an emergency motion before the Court for authority to use cash 

collateral and obtain DIP financing on an interim, and then final basis. 

B. Retention-Related Motions

1. Debtor’s Expedited Application for Authority to Employ and Retain Paul J. 

Battista and the Law Firm of Genovese Joblove & Battista, P.A. Effective as 

of April 20, 2021 (the “GJB Application”) 

35. The Debtor will file an application seeking approval, on an interim and final basis, 

of the employment of Paul J. Battista (“Battista”) and the law firm of Genovese, Joblove & Battista 

(“GJB”), to represent the Debtor as its general bankruptcy counsel in this Chapter 11 case effective 

as of April 20, 2021. 

2. Debtor’s Emergency Motion Pursuant to Sections 105(a) and 363(b) of the 

Bankruptcy Code for Authority to Employ and Retain Bob Butler as Chief 

Restructuring Officer and Other Personnel at Berkeley Research Group, 

LLC to Provide Advisory Services Effective as of April 20, 2021 (“CRO 

Retention Motion”) 

36. The Debtor will file a motion seeking approval to employ and retain me as CRO 

and Berkeley Research Group, LLC to provide advisory services effective as of April 20, 2021. 

C. Other First Day Motions 

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37. Once the Debtor is able to obtain the Books and Records pursuant to the Turnover 

Motion, then I anticipate that the Debtor will prepare and file several additional “first day” 

motions with the Court. As a result, I reserve the right to file additional or supplemental 

Declarations in connection therewith. 

CONCLUSION

In furtherance of its restructuring effort, the Debtor respectfully requests that orders 

granting the relief requested in the First Day Motions be entered. 

Dated: April 21, 2021 

 /s/ Bob Butler 

By: Bob Butler 

Chief Restructuring Officer

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