FirstEnergy Solutions Corp. Files Revised Disclosure Statement In Bankruptcy Case To Address Court's Rejection Of Non-consensual Releases
FES Says Revision Provides Path For Company To Successfully Conclude Chapter 11 In 2019
April 19, 2019 Email This Story Copyright 2010-19 EnergyChoiceMatters.com
Reporting by Paul Ring • email@example.com
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FirstEnergy Solutions Corp. ("FES" or the "Company") today announced that the Company has entered into an agreement with FirstEnergy Corp. ("FE") that eliminates the non-consensual third-party releases from the Company's proposed plan of reorganization that the U.S. Bankruptcy Court addressed in its recent ruling and which FES said, "provides a clear path forward for FES to conclude its Chapter 11 restructuring in 2019."
The Company has filed an amended plan of reorganization (the "Plan") and related disclosure statement (the "Disclosure Statement") reflecting the updated terms agreed to with FE with the Court overseeing its Chapter 11 restructuring. "The Company is confident that it will progress through the Chapter 11 plan confirmation process with its key constituents in a timely manner," FES said
As previously reported (see details here), a federal bankruptcy judge recently said from the bench that a prior disclosure statement that was part of the bankruptcy plan of FirstEnergy Solutions Corp. (FES) was, "patently unconfirmable," as the judge cited 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
"We are pleased that we were able to work quickly with FE to address the feedback from the Bankruptcy Court, while preserving all of the economic value to the Debtors of the Settlement Agreement previously approved by the Bankruptcy Court in September. The Company continues to believe that the revised Plan will significantly strengthen our financial position and allow FES to emerge as a fully integrated independent power producer focused on maximizing the operating and financial synergies of our retail, nuclear and fossil generating assets," said John Judge, chief executive officer and president of FES. "We appreciate the efforts of FE to work with us in addressing these issues and allow the Company to remain on track to conclude the Chapter 11 process in 2019."
Specifically, FES has entered into a consent and waiver agreement (the "Waiver Agreement") with FE that will permit the Company to move forward with the revised plan of reorganization that otherwise incorporates the terms of the previously approved Settlement Agreement with FE, excluding certain non-consensual third-party releases in favor of FE and its non-debtor subsidiaries.
"Under the terms of the proposed Plan, the Company will continue operating its nuclear and fossil generation facilities 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 / or meaningful market reforms," FES said
The effectiveness of the Waiver Agreement is subject to an order of the Bankruptcy Court approving the agreement. The Company's entry into the Waiver Agreement and announcement is not a solicitation of votes to accept or reject the Plan. The Disclosure Statement is subject to review and approval of the Bankruptcy Court, and votes will be solicited in accordance with the Bankruptcy Court's order approving such Disclosure Statement, once entered. There is no assurance that the Plan or Disclosure Statement will be approved by the Bankruptcy Court or the Company's creditors, or as to the timing of the Company's emergence from bankruptcy, FES said
FirstEnergy Corp. President and CEO Charles E. Jones said in a statement concerning the revised disclosure statement that, "Following the judge's recent decision involving FES' bankruptcy, FES committed to engage with the Department of Justice and other concerned parties. In light of this commitment, we agreed to remove the broad third-party releases from the comprehensive settlement. While the non-consensual releases served to bring finality to FirstEnergy's involvement with these legacy assets, this change does not, in our assessment and experience, increase liabilities or obligations to our company."