Kenetech Windpower (KW), a subsidiary of Kenetech Corp., on May 29 filed a voluntary petition of reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Northern District of California. Parent corporation Kenetech does not intend to seek bankruptcy relief, nor cause any of its subsidiaries not directly engaged in the windpower business to seek such relief. No determinations have been made with respect to future filings by KW's subsidiaries or lower-tier affiliates.
KW's management attributed its reorganization filing to continuing losses and a lack of operating capital due to deregulation of U.S. power markets and corresponding declines in avoided-cost payments by utilities. KW also pointed to declining wind turbine sales, the anticipated repair and warranty costs for its 33-meter wind turbine, and a failure to restructure certain contractual obligations.
Randall Swisher, executive director of the American Wind Energy Association, said that KW's financial problems send a clear signal: "At this writing, the United States is virtually the only industrialized nation whose government is failing to effectively support domestic wind energy development as a foundation for improved international competitiveness in the future."
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