FirstEnergy files plan of reorganization and disclosure statement

By Sarah Lizee

Olympia, Wash., Feb. 12 – FirstEnergy Solutions Corp. filed its plan of reorganization and related disclosure statement on Monday in the U.S. Bankruptcy Court for the Northern District of Ohio.

The disclosure statement hearing is scheduled for March 19.

The plan is based on settlements with various disputes between the debtors, the non-debtor parties and the creditors.

FirstEnergy said the plan resolves a variety of “highly complex issues that would have been a source of contention and which, if left unresolved, would have potentially led to significant costly litigation and resulted in uncertainty and delays in distributions to creditors and the debtors’ ability to timely exit bankruptcy protection.”

Distributions under the plan will be funded with the new FirstEnergy common stock, cash on hand and settlement cash, which includes a $225 million cash payment from FirstEnergy non-debtor parties and up to $628 million of new unsecured notes.

Holders of general unsecured claims will receive cash or new common stock in the reorganized debtors in lieu of cash.

Holders of unsecured bondholder claims will receive new common stock with an option to receive cash instead.

Holders of allowed administrative claims, allowed priority tax claims and allowed other priority claims will be paid in full in cash.

Holders of other secured claims will either be reinstated, paid in full in cash or receive the collateral securing the claims.

Holders of secured claims will either be reinstated or paid in full.

FirstEnergy Solutions interests will be cancelled with no distribution.

FirstEnergy Solutions is an Akron, Ohio, provider of energy and services to retail and wholesale customers. The company filed for bankruptcy on March 31, 2018 under Chapter 11 case number 18-50757.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.