Recall that in October 2007, just as the financial bubble was reaching its zenith, the energy company TXU--now known as Energy Future Holdings--was bought out by a consortium of private equity firms, led by KKR, Texas Pacific Group and Goldman Sachs.

At the time, the deal was hailed as one of the largest LBOs in history--quite a coup for the sponsors. Within a few years, however, the deal started to sour. The bondholders took some massive haircuts and natural gas prices proved anything buy buoyant. Bad karma still dogs the deal and it's gotten to the point where some speculate that the company will eventually fail.

Standard & Poor's has given the company a CCC rating, indicating a high chance of default. It also voiced concern over refinancing risk from 2014 through 2017, when around $25 billion of debt comes due, according to Reuters. In addition, the syndicated loans are trading at sorry levels. A $3.8 billion term loan due 2014 is trading at around 73 cents on the dollar, while the $15.4 billion loan due 2017 is trading around 67 cents on the dollar. The company's CDS prices suggest that that market is "pricing a 91 percent chance of default for Energy Future Holdings in the next five years."

The company will no doubt aim to refinance. It will also look for an outright buyer. Unfortunately, energy prices are providing very little help. That could change if the economy recovers, but right now pessimism reigns. To be sure, Energy Future Holdings is not the only deal from the blockbuster era to run into trouble. But it remains among the most troubled of that class of deals.

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