Dynegy (DYN) May Declare Chapter 11 Bankruptcy

Shares of Dynegy (NYSE:DYN) are down today, following the filing of their 10-K with the U.S. Securities and Exchange Commission yesterday where they revealed they may have to seek Chapter 11 protection in the case they not be able to amend or replace their existing credit facility.

The company also said in their latest quarterly report that they will no longer issue guidance: "In light of recent management and board changes that may affect the company’s strategic plans, Dynegy currently does not intend to provide guidance estimates for 2011."

Here's what Dynegy said in their filing: "In light of our likely non-compliance, we are attempting to amend or replace our existing Credit Facility. If we are able to amend our Credit Facility or enter into a new facility, we expect that capacity of any such facility to be less than the current capacity of $1.8 billion and to be at a higher cost, which reduced capacity and increased costs could have a material adverse effect on our ability to successfully run our business. We may also seek additional sources of liquidity in an effort to secure sufficient cash to meet our operating needs. These additional sources of liquidity could include asset sales, public or private issuances of debt, equity or equity-linked securities, debt for equity swaps, or any combination of these. However, we cannot provide any assurances that we will be successful in accomplishing any of these plans. If we are unable to successfully execute our plan to amend or replace our Credit Facility or otherwise obtain additional sources of liquidity, it may be necessary for us to seek protection from creditors under Chapter 11 of the U.S. Bankruptcy Code, or an involuntary petition for bankruptcy may be filed against us."

Dynegy was trading at $5.69, dropping $0.10, or 1.73 percent, as of 12:04 PM EST.