News / Resources

Houston partner Rob Shearer was quoted in an October 6 Houston Chronicle article, "Sale Just One Way Reliant Might Solve Financing Problems."

According to the article, Reliant Energy, facing pressure from the credit markets and the impact of Hurricane Ike, is exploring "strategic alternatives," a phrase that typically means a company is seeking a buyer for all or part of its business. The company might not be bought outright. It could find long-term financial backing that will stop the downward spiral of its stock price and credit rating.

Reliant appears to be in a credit spiral where one problem begets another that doesn't end until either a well-financed party steps in to stop the bleeding or the company goes out of business, said Shearer, who concentrates his practice on mergers and acquisitions. "It's common for other credit facilities to be dependent on stock price or credit ratings, so that the problems keep spiraling down," Shearer said.