Federal Bankruptcy Court Issues Interim Order Related to
Merger Litigation Between Central and South West Corporation and name="ELPASO">El Paso Electric Company
DALLAS, TX - April 11, 1997 - Central and South West
Corporation (NYSE: CSR) said today that Judge Larry Kelly, chief
bankruptcy judge for the U.S. Bankruptcy Court of the Western
District of Texas, issued an interim order in the litigation
between Central and South West and El
Paso Electric Company (AMEX: EE) over their merger agreement,
which Central and South West terminated in June 1995.
Judge Kelly ruled that Central and South West owes El Paso
Electric the $25 million termination fee under terms of the
termination provision of the merger agreement.
In addition, Judge Kelly ruled that Central and South West may
owe El Paso Electric "interest-carry" costs, alleged by
El Paso Electric to be approximately $18 million. The
interest-carry issue specifically was reserved for later
determination. The interim order also provides that, unless
separately ordered by the court, neither Central and South West
nor El Paso Electric can recover attorney fees or costs in the
case from each other.
Central and South West expressed disappointment in Judge
Kelly's findings and said it is considering further legal
The proposed merger between Central and South West and El Paso
Electric was announced May 4, 1993, and was terminated on June 9,
1995. Subsequently, both companies filed suits against each
other. The consolidated proceeding was tried by Judge Kelly in
Waco, Texas, during January 1997.
Central and South West Corporation is a public utility holding
company based in Dallas. Central and South West owns four
electric operating subsidiaries in the United States, a regional
electricity company in the United Kingdom, and non-utility
subsidiaries that offer independent power production,
telecommunications, energy efficiency and financial transactions.
SOURCE Central and South West Corp. /CONTACT: Media: Gerald R.
Hunter, manager of external communications, 214-777-1165, or
Financial Community: Becky Hall, director of investor relations,
214-777-1277, both of Central and South West Corporation/
Bankruptcy Court Awards El Paso Electric
EL PASO, Texas, April 11, 1997 - Judge Larry E. Kelly, Chief
Bankruptcy Judge for the U.S. Bankruptcy Court, Western District
of Texas, Austin Division, has found that the Central and South
West Corporation (NYSE: CSR) (CSW) owes href="chap11.elpaso.html">El Paso Electric Company (AMEX: EE)
(EPE) $25 million for payment of termination fees pertaining to
the 1993 failed Agreement and Plan of Merger which had provided
for a merger between EPE and CSW.
In addition, Judge Kelly stated that CSW may also owe EPE an
additional sum, referred to during the trial as the
"interest carry." However, this amount and its award,
if any, will be determined later. EPE and CSW each have 20 days
to advise the court on how they want to proceed on this issue.
EPE emerged from Chapter 11 bankruptcy protection in February,
1996. Under the terms of the Fourth Amended Plan of
Reorganization, $20 million of proceeds from the litigation with
CSW will be distributed to its former common and preferred
SOURCE El Paso Electric /CONTACT: Media: Teresa Souza,
915/543-5823, or Analysts: Leslie Beal, 915/543-2213, both of El