Footprint Power Salem files Chapter 11 to implement dual-track plan

By Sarah Lizee

Olympia, Wash., March 24 – Footprint Power Salem Harbor Development LP and its affiliates filed Chapter 11 bankruptcy on Wednesday in the U.S. Bankruptcy Court for the District of Delaware to implement a restructuring support agreement that has the support of holders of over 80% of secured facility claims, according to court documents.

In 2014, Footprint hired Iberdrola Engineering and Construction to build a 674-MW combined-cycle electric generating facility in Salem, Mass. Footprint later terminated the construction contract, and Iberdrola began an arbitration proceeding against the company. After three years of litigation, Iberdrola won the arbitration with an award of $237 million.

Footprint said that with the possibility of a judgment enforcement, foreclosure or other adverse action, the protection of Chapter 11 became necessary.

The RSA contains some milestones, like filing a pre-packaged Chapter 11 plan within 28 days from the petition date.

The prepetition secured parties have agreed to let the debtors use cash collateral to implement the restructuring process.

Plan terms

The RSA provides for either a stand-alone restructuring or a sale transaction.

According to the term sheet, holders of administrative claims and priority tax claims will be paid in full.

Holders of other secured claims will receive payment in full in cash, the collateral securing their claims, or reinstatement of their claims.

Holders of other priority claims will receive payment in full in cash.

If a stand-alone restructuring takes place, holders of credit facility claims will receive a pro rata share of 100% of the new common equity and exit facility loans, if applicable. If a sale takes place, holders will receive their pro rata share of the net sale proceeds until all claims are satisfied in full in cash.

If a stand-alone restructuring takes place, holders of general unsecured claims will receive their pro rata share of proceeds from the disposition of unencumbered assets. If a sale takes place, holders will receive their pro rata share of proceeds from the disposition of unencumbered assets and, only to the extent credit facility claims are paid in full, the net sale proceeds remaining until all general unsecured claims are paid in full in cash.

Intercompany claims will be reinstated or canceled with no distribution.

Holders of section 510(b) claims will receive no recovery.

Interests will be canceled with no distribution.

Debt details

As of Wednesday, the company had about $290 million outstanding under a single credit facility due Dec. 31, 2022 with MUFG Union Bank, NA as administrative and collateral agent. The company also has two outstanding letters of credit totaling $46.35 million.

The company listed $500 million to $1 billion in both assets and liabilities.

Its largest unsecured creditor is Iberdrola Energy Projects, Inc., based in Los Angeles, with a $237.11 million judgment claim.

Paul, Weiss, Rifkind, Wharton & Garrison LLP and Young Conaway Stargatt & Taylor, LLP are co-counsel to the debtors. AlixPartners is financial adviser. Houlihan Lokey Capital, Inc. is investment banker.

The Salem, Mass.-based power plant operator filed bankruptcy under Chapter 11 case number 22-10239.

© 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.