Calpine Bondholders Try to Block Debt Payment

Calpine Corp. was sued by bondholders seeking to block the power-plant owner from repaying $646 million in bond debt without adding a premium of as much as $31 million.

Calpine last month asked the U.S. Bankruptcy Court in New York for permission to repay the debt with proceeds of an asset sale and a loan. Judge Burton Lifland will consider the request at a hearing Wednesday.

The holders of 9.625% notes maturing in 2014 said allowing San Jose-based Calpine to repay the debt now would cost them the interest.