Shannon Wind, LLC: Wind Farm Seeks Going-Concern Sale

Shannon Wind, LLC, owner of the 204 MW wind farm, filed for Chapter 11 protection on January 25, 2026 in the U.S. Bankruptcy Court for the Southern District of Texas. The debtor operates a single-asset wind project with 119 GE 1.7-103 turbines and merchant exposure in ERCOT, and bankruptcy filings describe a plan to pursue a going-concern sale of the project while addressing hedge-related claims and litigation stemming from Winter Storm Uri.

The filing arrives in a market shaped by the February 2021 storm that pushed ERCOT prices to near $9,000/MWh and triggered a wave of disputes. Shannon Wind and Flat Top Wind sued Citigroup in 2021 over storm-era charges, a conflict that sits at the center of the current bankruptcy case. The Shannon project has also been tied to broader sponsor activity in North American renewables, including Alterra Power's acquisition by Innergex Renewable Energy and the project's early development as a joint venture with a Starwood Energy affiliate.

Restructuring

Sale strategy. Bankruptcy filings describe an expedited process to sell the wind project as a going concern. The debtor has indicated that a sale is expected to close within roughly 150 days of the petition date, followed by a liquidating plan to distribute proceeds. Because the case is in its first days, these milestones remain proposed and depend on court approval and market interest in the asset. That early-stage posture means the timeline could shift once secured parties and the court weigh in.

Sale mechanics implied by the milestones. The proposed timetable contemplates a fast-track sequence that typically includes a court-approved bidding procedures order, a marketing period for prospective buyers, and a sale hearing on the back end of the process. The debtor has not announced a stalking horse bidder or sale process terms beyond the requested deadlines, so the structure remains subject to approval and potential negotiation with secured parties and other stakeholders.

Single-asset structure and project footprint. Bankruptcy filings describe the debtor as a project company that owns the wind farm and controls the site through long-term leases and easements. That structure is common for renewable projects and can simplify a sale because the operating asset and related contractual rights are consolidated within a single entity. It also means that the sale process is likely to focus on project-level contracts, land rights, and the hedge-related obligations that are central to the case.

Cash collateral and liquidity. The debtor has not announced a standalone DIP facility. Instead, the early-stage filings request authority to use cash collateral subject to a 13-week budget and a rolling four-week variance cap of 115%. Adequate protection terms proposed in the cash collateral motion include replacement liens on pre- and postpetition assets, superpriority claims, payment of Citigroup Energy counsel fees, and a professional fee carve-out capped at $350,000 after a trigger event.

Cash management details. Filings describe seven active deposit accounts at Wilmington Trust and Citibank, plus dormant accounts at Citibank. Power sale proceeds are collected by the energy manager and remitted to the debtor, which then funds operations and vendor payments through an operating account. The cash management motion seeks authority to keep these existing accounts and to continue payment methods such as wire and ACH while the case proceeds.

First-day operational relief. The initial motion package seeks authority to maintain the debtor's cash management system and keep accounts at Wilmington Trust and Citibank while requesting a waiver of Section 345(b) investment requirements. It also requests authority to continue insurance programs that are financed through a premium finance agreement with AFCO, and proposes a utility assurance deposit of $4,725 in a segregated account. To keep the wind farm operating, the debtor seeks permission to pay critical vendors, including Consolidated Asset Management Services (CAMS), which provides operations and maintenance services, and Tenaska Power Services Co., which serves as the project's qualified scheduling entity and energy manager.

Critical vendors and lien claims. The critical vendor motion identifies CAMS and Tenaska as the main counterparties needed to maintain turbine availability and manage ERCOT scheduling. The requested interim payment cap is $80,000 for critical vendor claims and $15,000 for lien claims, with proposed final caps of $110,000 and $30,000, respectively. The motion conditions payment on trade agreements that require vendors to continue performing on customary terms.

Utilities and insurance. The utilities motion proposes a deposit sized to roughly two weeks of service and outlines a procedure that gives utilities a 20-day window to request additional assurance, with disputes resolved through a determination hearing. The insurance motion describes coverage for property, general liability, cyber, terrorism, and D&O risks, with premiums financed through AFCO and monthly payments due mid-month. These motions are designed to keep coverage and utility service in place during the sale process.

Litigation claimant notice procedures. The debtor has asked the court to approve specialized notice procedures for Winter Storm Uri-related claimants, including service on claimant counsel for represented parties and a tailored service list. The motion reflects the debtor's position that potential storm-related litigation claims are a distinct constituency that requires structured notice procedures early in the case. The notice motion proposes routing service through counsel of record when available and limiting duplicative mailings while preserving notice for unrepresented parties.

Claims agent and noticing. Bankruptcy filings identify Verita Global (KCC) as the claims and noticing agent, with responsibilities for maintaining the official claims register and distributing notices. The claims agent role is formalized through the first-day retention application and interim order.

Claims agent engagement terms. The retention application lists a $25,000 retainer subject to replenishment and hourly rates ranging from $24 to $196 depending on role. The engagement includes a 2.5% late charge after 30 days, annual rate increases with notice, and indemnification provisions that exclude gross negligence and willful misconduct. The interim order also adds data-use restrictions and reporting duties, including maintenance of the claims register and electronic access requirements.

Project Background and Operations

Asset profile. The Shannon Wind Farm is a 204 MW onshore wind project located in Clay County, Texas. The project reached commercial operations in December 2015 and is comprised of 119 General Electric turbines. The project delivers power into ERCOT and operates on a merchant basis, meaning revenues depend on wholesale prices rather than a long-term fixed-price power purchase agreement.

Turbine configuration. The farm uses GE 1.7-103 turbines across 119 units, a mid-2010s configuration typical for Texas wind projects that prioritize output at moderate wind speeds. The turbine platform and rotor configuration support the project’s merchant exposure in ERCOT by emphasizing consistent generation in regional wind conditions.

Turbine technical profile. The GE 1.7-103 platform has GE 1.7-103 specifications that list a 1.7 MW rated power, a 103-meter rotor diameter, and cut-in/cut-out wind speeds of 3.0 m/s and 23.0 m/s. The same specs cite a swept area of 8,332 m2, hub height options of 80 or 96 meters, and a spur/planetary gearbox paired with a double-fed asynchronous generator. The turbine is classified as IEC Class S for onshore use, reflecting a design optimized for site-specific wind regimes rather than extreme-wind peaks. Community and commercial positioning. Shannon Wind's output has been framed as enough to power more than 61,000 Texas households and construction has been described as creating over 250 jobs. In 2015, Facebook announced that its Fort Worth data center would be powered by renewable energy from the Shannon Wind Farm, highlighting how the project was positioned in the corporate renewable energy market even while its revenues were ultimately tied to ERCOT pricing and hedge structures rather than a traditional long-term offtake contract.

Location and resource profile. The project is located near Windthorst in Clay County, a region within the north-central Texas wind corridor that has seen extensive buildout of utility-scale wind capacity. That location places the project within ERCOT's primary wind zones and exposes it to congestion and curtailment dynamics that can materially affect energy settlements and basis pricing. These local factors influence why merchant projects in the region often rely on hedges or proxy generation contracts to stabilize cash flows.

Construction and early commercialization. The project lists Mortenson Construction as EPC contractor and has been associated with corporate renewable energy demand; a 2015 announcement tied Shannon Wind output to Facebook's Fort Worth data center. Industry sources note that the project's output has been described as sufficient to power more than 61,000 Texas households, a framing used for public communications rather than contractual revenue structure.

Operational footprint. Bankruptcy filings state that the debtor controls the project site through long-term leases and easements, and that the wind farm relies on external service providers for operations, maintenance, and scheduling. The use of a qualified scheduling entity and energy manager is common in ERCOT markets where merchant generators must manage congestion, settlement, and market participation requirements. These structural choices affect working capital needs and explain why the debtor sought critical vendor authority to pay vendors like CAMS and Tenaska early in the case.

Market exposure. Merchant exposure in ERCOT means the project sells power at market prices and often relies on hedges to stabilize cash flows. The lack of a long-term contracted offtake typically increases revenue volatility, which can tighten liquidity during periods of low output or market stress. This exposure is central to the Shannon Wind filing, which is tied to a dispute over a fixed-price hedge with Citigroup Energy Inc.

Ownership and Sponsor History

Original ownership structure. Shannon Wind is described as a joint venture between Alterra Power and a Starwood Energy affiliate, each holding a 50% interest in the project. That ownership structure appears in the project description of the wind farm and is typical of mid-2010s U.S. wind development, where developers partnered with financial sponsors to fund construction and tax equity structures.

Alterra and Innergex transaction. In October 2017, Innergex Renewable Energy agreed to acquire Alterra Power for a C$1.1 billion deal, a transaction that brought Alterra's operating portfolio and development pipeline into Innergex. The acquisition announcement listed Shannon Wind among Alterra's notable assets and framed the deal as a way to expand Innergex's U.S. footprint and long-term contracted generation.

Portfolio context. The acquisition announcement positioned Alterra’s U.S. wind portfolio as a growth platform for Innergex, with Texas assets like Shannon Wind and Flat Top featured as part of its North American expansion. The transaction framing underscores why Shannon Wind’s ownership history is tied to sponsor-level strategies rather than a single corporate off‑taker. acquisition announcement

Related Texas wind assets. Alterra's Texas portfolio included Flat Top Wind, a 200 MW project that reached commercial operations in 2018 and was described as Innergex's second Texas wind farm. The Flat Top project featured a separate ownership structure involving a fund managed by BlackRock Real Assets, showing how sponsor partnerships and co-investments were common in the region's wind buildout.

Acquisition terms and financing. Innergex's 2017 announcement stated that Alterra shareholders would receive C$8.25 per share, a 58% premium to the prior 20-day trading average. The transaction included commitments such as C$150 million financing, underscoring the role of institutional capital in scaling wind portfolios during the period when Shannon Wind was in early commercial operation.

Scale and portfolio mix. Alterra’s portfolio mix across operating and development-stage assets helps explain why Shannon Wind’s ownership and financing history spans multiple institutional players and why the project’s performance is tied to broader sponsor strategies rather than a single corporate off‑taker.

Strategic rationale. The acquisition was framed as accelerating Innergex's growth toward a 2,000 MW target by 2020. The emphasis on scale and diversified assets suggests that Shannon Wind was built and financed within a broader portfolio strategy, which can affect how sponsors evaluate asset sales when market conditions shift.

Implications for Shannon Wind. The sponsor history provides a lens on Shannon Wind's capital structure and counterparty relationships. Merchant exposure and hedge arrangements were often layered onto these projects to provide revenue stability in lieu of long-term offtake, but the reliance on hedges also created downside risk when extreme price events occurred, as was the case during Winter Storm Uri.

Winter Storm Uri and Hedge Dispute Context

Storm impact on ERCOT. Winter Storm Uri hit Texas in February 2021 and forced widespread load shedding. The event led to rolling blackouts ordered by ERCOT and pushed the grid within minutes of system-wide failure. The storm caused hundreds of deaths and was associated with over $195 billion in estimated economic damages, making it one of the most expensive disasters in Texas history.

Scale of outages. The storm knocked out nearly half of Texas power plants and left 4.5 million people without heat or light. Those system-wide outages are part of the reason ERCOT kept prices at the $9,000/MWh cap for multiple days, a decision that later became a focal point of financial disputes and regulatory scrutiny. Price spike mechanics. During the storm, ERCOT's market price cap of $9,000 per MWh remained in place for multiple days, a dynamic that later became a focal point in both regulatory inquiries and private disputes. Post-event analysis highlighted how fixed-volume hedge contracts could invert project economics when output falls and replacement power must be purchased at extreme prices. A June 2022 review described $9,000/MWh for three days and explained why fixed-volume structures created the most acute exposure for generators with variable output.

Market criticism and aftermath. ERCOT's price cap remained in place longer than necessary, producing about $16 billion in additional charges. The perception that administrative price settings magnified storm-era losses contributed to continued litigation and policy debate, and it underscores why financial stakeholders scrutinize hedge terms for ERCOT wind assets.

Litigation against Citigroup. Shannon Wind and Flat Top Wind filed suit against Citigroup in 2021, alleging that Citi billed the projects for replacement power at $9,000/MWh during the storm rather than the contracted fixed-price levels. The lawsuit asserted that Citi billed Shannon Wind $39.5 million over four days of electricity and billed Flat Top $79.3 million over seven days, amounts that exceeded projected annual revenues for the projects.

Parallel reporting on the dispute. The litigation has also been described as a response to roughly $100 million in charges linked to the storm.

Broader legal landscape. The Uri event produced a wave of litigation across the Texas power sector. By 2023, lawyers expected thousands of cases as the statute of limitations approached, with suits targeting generators, utilities, and ERCOT itself. In 2024, the Texas Supreme Court held that ERCOT could not be sued for blackout damages, a ruling that shifted litigation pressure to market participants and service providers. In 2025, the court agreed to review claims against utilities, underscoring the continuing legal exposure from the storm.

Utility litigation continues. The Texas Supreme Court agreed to review a utility petition seeking dismissal of gross negligence and intentional nuisance claims related to Uri, with arguments centered on whether utilities can be held liable for following ERCOT directives. The review signaled that even years after the storm, major legal questions remained open and the litigation environment for ERCOT market participants continued to evolve.

Why Uri matters to this case. The Shannon Wind bankruptcy centers on hedge obligations and litigation disputes that emerged from the storm. That context is essential for understanding why a project that operated for nearly a decade under a typical merchant-and-hedge structure is now in bankruptcy and seeking a sale. The case reflects how a single extreme price event can destabilize project finance structures that rely on fixed-volume hedge agreements for revenue certainty.

Capital Structure and Creditor Dynamics

Reported debt and hedge obligations. Bankruptcy filings list approximately $5.1 million in funded debt at the project level. The same filings state that Citigroup Energy Inc. asserted about $102.9 million in obligations under the power hedge agreement, with total hedge and protective advance obligations stated at approximately $108.1 million. The size of the hedge claim relative to the project's funded debt illustrates why the dispute is the principal driver of the case.

Protective advances and liquidity. In addition to hedge-related amounts, Citigroup provided a protective advance note of roughly $5 million to fund operations. These advances are part of the creditor dynamic because they tie short-term liquidity support to the broader hedge dispute and add complexity to the cash collateral framework proposed in the first-day motions.

How hedge structures shape recoveries. Texas wind projects often use hedges to establish price floors for spot market electricity sales. Fixed-volume swaps can be physically or financially settled, and proxy-generation structures tie payments to notional production rather than actual output. These structures can stabilize cash flows in normal markets but can also create negative correlation risk when output drops and prices spike, a phenomenon that became evident during Winter Storm Uri.

Post-Uri hedge evolution. After Uri, new hedge contracts shifted away from fixed-volume structures and toward dynamic management provisions, caps, and call options designed to limit extreme losses. A June 2022 review said that fixed-volume contracts remain rare and that newer structures use mechanisms to cut off extreme price exposure. This shift highlights the market's recognition that hedge terms can materially affect project outcomes, which may influence Shannon Wind's sale prospects and valuation.

Covariance risk in merchant wind. A key issue for ERCOT wind projects is the negative correlation between output and price during extreme weather. When wind speeds drop during severe cold events, generation can fall just as wholesale prices rise. Hedge structures that assume consistent output can therefore turn into large cash obligations. The post-Uri literature notes that lenders and offtakers re-evaluated these structures and added terms that allow counterparties to reduce exposure when prices exceed defined thresholds. These market changes are relevant for Shannon Wind because the case hinges on a pre-Uri hedge agreement that did not include newer protective features.

Financing implications. Lenders faced higher downside risk in merchant wind portfolios and expected debt pricing premiums. Fixed-volume hedges were a source of outsized exposure, and proxy generation or hybrid structures became more common to reduce negative correlation risk. Those shifts are relevant for any buyer evaluating Shannon Wind because they influence how much leverage a project can support and how a buyer will structure hedge coverage after closing.

Implications for recoveries. The dominance of the hedge claim suggests that sale proceeds will be heavily influenced by the resolution of Citigroup's asserted obligations. If the hedge claim is allowed in full, the secured counterparty's recovery position will likely limit distributions to other creditors unless the asset attracts a materially higher sale price. The outcome will depend on how the court treats the hedge obligations, the sale process, and any negotiated settlement that may arise in the course of the case.

Creditor priorities. The proposed cash collateral framework provides Citigroup with replacement liens and superpriority claims, signaling a secured position that will likely dominate creditor negotiations. Other stakeholders, including trade creditors and litigation claimants, may have more limited recoveries absent a higher-than-expected sale outcome. The case's outcome will therefore depend on the project's sale value, the treatment of hedge claims, and the resolution of any contested litigation tied to Uri.

Case Timeline and Next Milestones

Key events to date. The debtor filed its Chapter 11 petition on January 25, 2026, and submitted first-day motions the next day. A virtual first-day hearing was scheduled for January 28, 2026. These early filings set the foundation for cash collateral usage, critical vendor payments, and notice procedures but do not finalize the long-term path for the estate.

Proposed milestones. The cash collateral motion sets a sequence of proposed deadlines: a final cash collateral order within 45 days of the petition date, a bidding procedures order within 35 days, sale approval within 120 days, and a sale closing within 150 days. These targets are not yet court-approved and could shift depending on creditor negotiations and the pace of the marketing process.

Near-term focus. In the weeks following filing, the case will focus on approval of cash collateral use, confirmation of the critical vendor structure that keeps operations running, and approval of the litigation claimant notice procedures. The claims agent will also establish the service list and claims register, and the debtor will use the first-day orders to maintain normal operating activities while preparing for a sale process.

First-day motions in detail. The debtor's initial filings cover standard operational relief, including cash management authority, utilities assurance, insurance continuation, and schedules extension. The critical vendor motion seeks limited payments to CAMS and Tenaska, while the litigation claimant notice motion proposes a specialized service list for Winter Storm Uri-related claimants. These steps are designed to preserve operational continuity and create a structured claims process during the early stage of the case.

Timing considerations. If the proposed milestones are approved, the timeline would compress the traditional Chapter 11 sale schedule into a few months. That compressed timeline puts pressure on the debtor to market the project quickly, secure a qualified buyer, and resolve or manage hedge-related disputes during the same window. The interplay between cash collateral requirements and sale timing is therefore likely to be the central negotiation point between the debtor and Citigroup Energy Inc. as the case progresses.

Frequently Asked Questions

Why did Shannon Wind, LLC file for chapter 11?

The debtor defaulted under a power hedge with Citigroup Energy Inc. and filed Chapter 11 to pursue a going-concern sale while addressing hedge claims and litigation exposure that escalated after Winter Storm Uri. The broader risk of fixed-volume hedges during Uri has been analyzed in post-storm hedge analysis and in reports on Citi storm charges.

When did Shannon Wind, LLC file for chapter 11?

The petition was filed on January 25, 2026.

What is the case number and court?

The case is 26-90124 in the U.S. Bankruptcy Court for the Southern District of Texas.

What assets does Shannon Wind, LLC own?

The debtor owns the 204 MW Shannon Wind Farm in Clay County, Texas, which uses 119 GE 1.7-103 turbines.

Is there a DIP financing or cash collateral order?

No standalone DIP facility has been announced. The debtor has asked the court to authorize cash collateral use under a 13-week budget with milestone-driven approvals; final orders are pending at the early stage of the case.

What is the expected timeline for the case?

The debtor's proposed milestones target a final cash collateral order within 45 days of the petition date, bidding procedures within 35 days, sale approval within 120 days, and a sale closing within 150 days, subject to court approval and market interest.

Who is the claims agent for Shannon Wind, LLC?

Verita Global (KCC) serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.

Read more restructuring updates on the ElevenFlo blog.