Calpine sued the Bank of New York September 26 and asked the court to approve its spending of capital on gas purchases to supply its fleet of power plants. Four days earlier, the bank, as a trustee for bondholders, had halted the company's access to about $400 million in the gas sale proceeds account managed by the bank. Calpine, which is junk-bond territory, has suffered financial slights as it works to reduce its $18 billion debt (Circuit, Aug. 13, 2005). The company asked the court this week for a legal declaration approving its gas purchases. "Either we could buy gas assets or pay" a second tier of bondholders, Bob Kelly, Calpine chief financial officer, told investors September 27. Calpine paid off first lien holders, he said, with $139 million from the sale of domestic oil and gas assets in July for $1.05 billion. Calpine, he said, has a $7 billion\/year fuel bill. At the same time, it is struggling to reduce its debt from $18 billion to $16 billion by the end of the year. Many of Calpine's plants are fired with natural gas, although the company has geothermal facilities. Kelly said the company believes that the price of gas will be $12\/MMBtu in the future.