Calpine Files Plan of Reorganization to Emerge From Chapter 11

    SAN JOSE, Calif. and HOUSTON, June 20 /CNW/ -- Calpine Corporation (OTC
Pink Sheets:   CPNLQ) today announced it and certain of its subsidiaries have
filed a Joint Plan of Reorganization and Disclosure Statement with the United
States Bankruptcy Court for the Southern District of New York.  The Plan of
Reorganization seeks to provide an equitable return to all stakeholders while
providing for the long-term viability of the Company. With this filing,
Calpine looks to have the Plan confirmed during the 4th Quarter 2007.
    "The filing of our Plan of Reorganization is a significant milestone on
our road to recovery and takes us one giant step closer to successfully
reorganizing Calpine for the benefit of our stakeholders, employees, and
customers," said Robert P. May, Calpine's Chief Executive Officer.  "While we
still have much to do in order to complete this process, this proposed Plan of
Reorganization provides a clear path for Calpine to emerge as a stronger, more
financially stable Company with an improved competitive position in the energy
    Mr. May concluded, "I want to thank my 2,300 co-workers and the Company's
retained professionals for their unwavering support and hard work during this
process.  Their perseverance and commitment to Calpine has played a
significant role in getting us to this point."
    "This has been the largest and most complex reorganization conducted
under the new bankruptcy laws," said Gregory L. Doody, Executive Vice
President, General Counsel and Secretary.  "We are very proud of what we have
accomplished thus far and the value we have created, working together with our
committees and the Court, for the benefit of all stakeholders.  We look
forward to continuing discussions with our key constituencies to reach a
comprehensive agreement and will seek to exit court protection as
expeditiously as possible."
    The Disclosure Statement filed today contains a historical profile of the
company, a description of proposed distributions to creditors, and an analysis
of the Plan's feasibility, as well as many of the technical matters required
for the exit process, such as descriptions of who will be eligible to vote on
the Plan and the voting process itself.
    The Plan is a "waterfall" plan that allocates value to the Company's
creditors and shareholders in accordance with the priorities of the Bankruptcy
    Pursuant to the Plan, allowed administrative claims and priority tax
claims will be paid in full in cash or cash equivalents, as will the allowed
first and second lien debt claims.  Other allowed secured claims will be
reinstated, paid in full in cash or cash equivalents, or have the collateral
securing such claims returned to the secured creditor.  Allowed unsecured
claims will receive a pro rata distribution of reorganized Calpine common
stock until paid in full.  Allowed unsecured convenience class claims (all
claims $50,000 or less) will be paid in full in cash or cash equivalents.
Finally, any remaining value after such allowed creditors' claims have been
paid in full will be distributed pro rata to existing holders of allowed
interests (primarily holders of existing Calpine common stock) and holders of

    subordinated equity securities claims in the form of reorganized Calpine
common stock.
    Assuming Calpine exits from bankruptcy on Dec. 31, 2007 and subject to
the assumptions set forth in the Disclosure Statement, Calpine estimates that
reorganized Calpine will have a midpoint reorganization value of $21.7 billion
(reorganization value is equal to total enterprise value plus estimated
distributable cash).  Calpine estimates that its total enterprise value will
be between $19.2 billion to $21.3 billion, with a midpoint of $20.3 billion,
and estimates that distributable cash will be approximately $1.4 billion at
    Calpine noted that allowed claims will range from $20.1 billion to $22.3
billion after completion of Calpine's claims objection, reconciliation, and
resolution process.  Under this range of potential allowed claims, general
unsecured creditors will receive from 91% to 100% of their allowed claims.  In
order to clarify further its recovery estimates, Calpine recently initiated
litigation challenging so-called "makewhole," premium, or "no-call" claims
asserted by Calpine's second lien debt holders and unsecured creditors, and it
continues to move aggressively to resolve other disputed claims asserted
against it in the bankruptcy case.  Under the Plan, Calpine estimates, when
adjusted for litigation risk and the assumptions and limitations set forth in
the Disclosure Statement, that allowed claims of unsecured creditors will be
paid in full and that existing holders of allowed interests (primarily holders
of existing Calpine common stock) and holders of allowed subordinated equity
securities claims will receive value of approximately $1.80 per existing share
of Calpine common stock (calculated assuming the midpoint of the
reorganization value).  Because disputed claims and the total enterprise value
of Calpine upon its emergence have not yet been finally adjudicated, no
assurances can be given that actual recoveries to creditors and interest
holders will not be materially higher or lower.
    Calpine also announced it has received a commitment for an amended and
upsized exit facility from Goldman Sachs, Credit Suisse, Deutsche Bank, and
Morgan Stanley.  Simultaneous with the filing of its Plan, Calpine filed a
motion to enter into a commitment letter, pay associated commitment and other
fees, and to amend and upsize the existing debtor in possession financing
facility.  If approved, the upsized exit facility would provide for up to $8
billion in secured financing, some $3 billion more than the existing exit
facility, on terms that Calpine views as favorable.  The commitment to fund
the exit facility expires on January 31, 2008.

    Next Steps in Reorganization Process
    The Plan and Disclosure Statement have not been approved by the
Bankruptcy Court and are subject to further negotiations with stakeholders. 
As a result, the Plan and Disclosure Statement may be materially modified
before approval. Calpine intends to request and the Court will conduct a
hearing to consider the legal adequacy of the Disclosure Statement.  This
hearing date has not yet been set by the Bankruptcy Court.  If the Court
determines that the Disclosure Statement provides sufficient information for
claim holders and other interested parties to vote on the Plan, then the
Disclosure Statement and Plan will be sent to claim holders for voting
purposes. Following the voting process, Calpine will ask the Bankruptcy Court
to hold a hearing to consider approval or "confirmation" of the Plan.  If the
Court confirms the Plan, Calpine would emerge from Chapter 11 shortly
thereafter.  Calpine currently anticipates this process will take several
months.  As of the date of this press release, neither Calpine's Official
Committee of Unsecured Creditors nor Official Equity Securityholders Committee
has endorsed the Plan although Calpine has engaged in discussions with, and
included numerous modifications proposed by, the Committees in the Plan and
Disclosure Statement.  Calpine intends to engage in further discussions with
both Committees and other stakeholders in an effort to obtain their support
for the Plan in its current form or as it may be amended.

    Calpine's Plan and Disclosure Statement are available at

    This release is not intended as a solicitation for a vote on the Plan.

    Webcast Scheduled for Today
    Calpine will hold a conference call today to brief media at 6:30 p.m.
Eastern Daylight Time to discuss the filing of Calpine's Plan of
Reorganization and Disclosure Statement with the United States Bankruptcy
Court in the Southern District of New York.  Calpine's Executive Vice
President, General Counsel and Secretary, Gregory L. Doody, will host the
call.  Members of the media will have an opportunity to ask questions
following the briefing.

    WHEN:     6:30 p.m. EDT
              Wednesday, June 20, 2007

    DIAL-IN:  888-694-4641 United States
              973-582-2734 Outside the United States
              Passcode: 8947922

    WEBCAST:  An audio webcast of the call can be accessed at

    A telephonic replay of the June 20 conference call will be available on
Thursday and can be accessed through June 27.  The replay access number is
877-519-4471 (United States) and 973-341-3080 (outside the United States),
passcode 8947922.  The webcast will be archived for seven days at

    About Calpine
    Calpine Corporation is helping meet the needs of an economy that demands
more and cleaner sources of electricity.  Founded in 1984, Calpine is a major
U.S. power company, currently capable of delivering nearly 25,000 megawatts of
clean, cost-effective, reliable, and fuel-efficient electricity to customers
and communities in 18 states in the U.S.  The company owns, leases, and
operates low-carbon, natural gas-fired, and renewable geothermal power plants.
Using advanced technologies, Calpine generates electricity in a reliable and
environmentally responsible manner for the customers and communities it
serves.  Please visit for more information.

    Forward Looking Statement
    This news release discusses certain matters that may be considered
"forward-looking" statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended, including statements regarding the intent, belief or
current expectations of Calpine Corporation and its subsidiaries ("the
Company") and its management and uses words such as "believe," "intend,"
"expect," "anticipate," "plan," "may," "will" and similar expressions to
identify forward-looking statements.  Such statements include, among others,
those concerning the Company's expected financial performance and strategic
and operational plans, as well as all assumptions, expectations, predictions,
intentions or beliefs about future events.  Readers are cautioned that any
such forward-looking statements are not guarantees of future performance and
that a number of risks and uncertainties could cause actual results to differ
materially from those anticipated in the forward-looking statements.  Such
risks and uncertainties include, but are not limited to: (i) the risks and
uncertainties associated with the Company's Chapter 11 cases and Companies'
Creditors Arrangement Act proceedings, including impact on operations; (ii)
the Company's ability to attract, retain and motivate key employees and
successfully implement new strategies; (iii) the Company's ability to
successfully reorganize and emerge from Chapter 11; (iv) the Company's ability
to attract and retain customers and counterparties; (v) the Company's ability
to implement its business plan; (vi) financial results that may be volatile
and may not reflect historical trends; (vii) the Company's ability to manage
liquidity needs and comply with financing obligations; (viii) the direct or
indirect effects on the Company's business of its impaired credit including
increased cash collateral requirements; (ix) the expiration or termination of
the Company's power purchase agreements and the related results on revenues; (*)
potential volatility in earnings and requirements for cash collateral
associated with the use of commodity contracts; (xi) price and supply of
natural gas; (xii) risks associated with power project development,
acquisition and construction activities; (xiii) risks associated with the
operation of power plants, including unscheduled outages of operating plants;
(xiv) factors that impact the output of the Company's geothermal resources and
generation facilities, including unusual or unexpected steam field well and
pipeline maintenance and variables associated with the waste water injection
projects that supply added water to the steam reservoir; (xv) quarterly and
seasonal fluctuations of the Company's results; (xvi) competition; (xvii)
risks associated with marketing and selling power from plants in the evolving
energy markets; (xviii) present and possible future claims, litigation and
enforcement actions; (xix) effects of the application of laws or regulations,
including changes in laws or regulations or the interpretation thereof; and
(xx) other risks identified the risk factors identified in its Annual Report
on Form 10-K for the year ended December 31, 2006, and its Quarterly Report on
Form 10-Q for the quarter ended March 31, 2007, which can also be found on the
Company's website at  All information set forth in
this news release is as of today's date, and the Company undertakes no duty to
update this information.

For further information:

For further information: Media Relations, Mel Scott, +1-713-570-4553,, or Investor Relations, Karen Bunton, +1-408-792-1121,, both of Calpine Corporation Web Site:

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