NorthWestern asks court to extend its exclusive right to solicit votes

By Jeff Pines

Washington, Sept. 1 - NorthWestern Corp. asked the U.S. Bankruptcy Court for the District of Delaware Tuesday to extend its exclusive right to solicit votes for its reorganization plan to Oct. 31. The current period ends Sept. 30.

The Sioux Falls, S.D.-based utility said it needs more time to solicit its creditors because it amended the plan after reaching a settlement with the holders of $321 million of trust preferred securities.

The holders of the TOPrS and Wilmington Trust Co., the indenture trustee, were unhappy with the estimated recovery for the class and rejected the plan. To get their support, NorthWestern negotiated a settlement improving their recovery to 15.3% from 3.6%. In doing so, however, the company had to reduce the estimated recovery for the noteholders and holders of general unsecured claims, who were originally to recover an estimated 73.7% but under the settlement will recover 68.4%.

Under the amended reorganization plan, the TOPrS holders will get 6.6% of the reorganized company's common stock plus warrants to buy 10.6% more.

The noteholders and general unsecured claimsholders will get 91% of the reorganized company's stock instead of the previous 98%.

As a result of the change, NorthWestern has to solicit all three classes again.

NorthWestern filed for bankruptcy on Sept. 14, 2003. Its Chapter 11 case number is 03-12872.

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