Calpine Hires New CEO Amid Crisis

Struggling power merchant Calpine Corp. on Monday hired veteran troubleshooter Robert P. May as its new chief executive, charging him with cleaning up a financial mess that could force the company to seek bankruptcy protection.

May, 56, takes over from Calpine director Kenneth Derr, who had been handling the chief executive job on an interim basis since the San Jose-based company ousted its founder, Peter Cartwright, two weeks ago.

Calpine is tying its fortunes to an executive who is well seasoned in crisis management.

In 2003, May took over as interim CEO of scandal-ridden HealthSouth Corp. when the healthcare provider fired Richard Scrushy after uncovering rampant accounting abuses.

“We are excited about what Bob brings to Calpine,” Derr said in a statement. “His leadership qualities, experience and knowledge will help lead Calpine through a critical period in the company’s history.”

Since Calpine dumped Cartwright, most investors have been betting that Calpine will seek shelter in Bankruptcy Court as it grapples with more than $17 billion in debt amid steady losses.

Calpine’s shares gained 3 cents Monday to 31 cents in the over-the-counter market.

In recent interviews, Derr has acknowledged that Calpine might file for bankruptcy protection. But May didn’t directly address that possibility in a statement released with the announcement of his appointment.

“I have a solid understanding of the challenges that lay ahead,” May said. “We are committed to successfully addressing our operational and financial issues in the best interests of all stakeholders.”

Calpine didn’t immediately respond Monday to a request for an interview with May.

May and his successors managed to keep HealthSouth out of bankruptcy even as investors lost faith in the company as more than a dozen former executives pleaded guilty to fraud charges.