GenOn Energy Inc.
Multi-billion dollar utility GenOn Energy Inc. filed for Chapter 11 bankruptcy restructuring on June 14, 2017. This outcome primarily resulted from GenOn's excessive debt load and persistent weakness in natural gas prices. Acquired by NRG Energy in 2012, GenOn's downfall parallels Energy Future Holdings Corp's corporate failure in 2014.
This Bankruptcy Case Study displays GenOn's FRISK® score of "1," which indicated a significant probability of financial distress over the coming 12 months. Risk managers will find other important red flags highlighted, including reported EBITDA and free cash flow both turning negative in the second quarter of 2016. Lastly, we present new alerts over a 15-month period that show the utility's increasing risk profile prior to its bankruptcy filing.
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About Bankruptcy Case Studies
CreditRiskMonitor Bankruptcy Case Studies provide post-filing analyses of public company bankruptcies. Our case studies educate subscribers about methods they can apply to assess bankruptcy risk using CreditRiskMonitor’s proprietary FRISK® score, robust financial database, and timely news alerts.
In nearly every case, a low FRISK® score gave our subscribers early warning of financial distress within a one-year time horizon. CreditRiskMonitor's proprietary FRISK® score predicts bankruptcy risk at public companies with 96% accuracy. The score is formulated by a number of indicators including stock market capitalization and volatility, financial ratios, bond agency ratings from Moody’s, Fitch and DBRS, and crowdsourced behavioral data from a subscriber group that includes 35% of the Fortune 1000 and thousands more worldwide.
Whether you are new to credit analysis or have decades of experience under your belt, CreditRiskMonitor Bankruptcy Case Studies offer unique insights into the business and financial decline that precedes bankruptcy.