Judge Says Part Of FirstEnergy Solutions Bankruptcy Plan "Unconfirmable" Due To Release Of Environmental Liabilities
FES To File Revised Disclosure Statement
April 5, 2019 Email This Story Copyright 2010-19 EnergyChoiceMatters.com
Reporting by Paul Ring • firstname.lastname@example.org
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A federal bankruptcy judge said from the bench yesterday that a disclosure statement that is part of the bankruptcy plan of FirstEnergy Solutions Corp. (FES) is, "patently unconfirmable," as the judge hit provisions in such statement which would release FirstEnergy Corp. from environmental liabilities related to FES power plants, which are to no longer be affiliated with FirstEnergy Corp. after the restructuring, as proposed
Certain bankruptcy settlement agreements with creditors had contemplated the granting of such liability releases, raising questions concerning the broader settlements
The judge withheld a written ruling on the disclosure statement, and FES said that it will file a revised statement
Specifically, FirstEnergy Solutions Corp. ("FES" or the "Company") announced that the Company expects to submit a revised Disclosure Statement for its proposed Plan of Reorganization ("the Plan") to the U.S. Bankruptcy Court overseeing its Chapter 11 restructuring.
"Working with our advisors, we have already initiated action to address the Court's ruling and will submit a new request to have the disclosure statement approved in a timely manner," said John Judge, CEO and President of FES. "The Company remains focused on a plan that will significantly strengthen its financial position and allow it to exit Chapter 11 in 2019."
FES said that, "Today's Court ruling has no impact on the Company's operations or its ability to continue serving customers with safe, reliable, and clean energy."
As previously announced, the Company, the official committee of unsecured creditors (the "Committee"), two creditor groups representing a majority in aggregate amount of the Debtors' funded indebtedness and sale-leaseback certificates (the "Ad Hoc Groups"), and a group of creditors holding claims against FES and FirstEnergy Nuclear Operating Co. (the "FES Creditor Group") have reached agreement on the terms of a Restructuring Support Agreement ("RSA") that contemplates the continued ownership and operation of the Company's retail and wholesale load-serving business following emergence from Chapter 11 protection. The Court authorized the Company to enter into the RSA in March.
FES said that, "The proposed Plan will enable the Company to emerge as a fully integrated Independent Power Producer focused on maximizing the operating and financial synergies of its retail, nuclear and fossil generating assets. The Company will continue operating its nuclear and fossil generation until their previously announced deactivation dates, with a possibility of running the units for an extended period if the Company obtains sufficient legislative support and meaningful market reforms."