Longview Power asks for more time to file bankruptcy reorganization plan

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Longview Power and related coal-producing companies on Dec. 31 asked their bankruptcy court to further extend their exclusive right to file a chapter 11 plan through and including Feb. 28, 2015, and to solicit votes in support of that plan out through April 30, 2015.

Longview's primary asset is a 700-MW (net), coal-fired power plant in northern West Virginia, on the Monongahela River. Related coal companies, including Mepco LLC, produce coal out of nearby mines for both the Longview power plant and the outside market. The companies sought chapter 11 protection in August 2013 at the U.S. Bankruptcy Court for the District of Delaware.

The old exclusivity deadline for the filing of the plan was Dec. 31, but that deadline is now frozen while the court considers whether to extend it.

"The Debtors seek an additional extension of the Exclusivity Periods to allow the Debtors to complete their complex operational and financial restructuring without burdening their estates with competing chapter 11 plans," the companies told the court. "The Debtors are focused on obtaining confirmation of the Amended Plan, for which they are currently soliciting votes and for which they hope to seek confirmation in the near term. To prosecute the Amended Plan, the Debtors are vigorously engaged in crucial litigation with First American Title Insurance Company ('First American') regarding the Debtors' property interest in, and the availability of coverage under, the Policy of Title Insurance, policy number A40008468, issued on March 9, 2007 (the 'Title Policy')."

The companies added: "Moreover, the Debtors continue to pursue good-faith mediation with the Contractors, the Backstoppers, and First American to resolve the contingencies that remain in these chapter 11 cases. Against this backdrop, the Debtors submit that a further extension of the Exclusivity Periods will facilitate the Debtors' concurrent efforts to drive these chapter 11 cases to a successful conclusion and to maintain stability with their employees, business partners, and creditors."

The Backstoppers, which are financial entities that hold more than 60% of the Debtors' prepetition funded debt, support the deadline extensions, the companies added.

Achievements so far in chapter 11 protection include negotiating the consensual equitization of more than $1bn in prepetition debt, stabilizing the long-term future of the coal mining and processing operations through successful negotiations with coal customer FirstEnergy (NYSE: FE), locking in an important piece of the “fix” required for the Longview Power Facility through the Debtors' settlement with Foster Wheeler (one of the three Contractors), and vigorously prosecuting the Debtors' property interest in, and the availability of coverage under, the Title Policy issued by First American, the companies said.

"Even with these successes, however, complex issues remain that require resolution before the Debtors can emerge from chapter 11," they added. "Indeed, the Debtors still must resolve the material overhang to their capital structure arising from Kvaerner's and Siemens' remaining contingent, disputed, and unliquidated Mechanics' Lien Claims. And, as the Court is aware, obtaining a determination regarding the Debtors' interest in the Title Policy proceeds provides a mechanism to address the alleged Mechanics' Lien Claims and to bring these chapter 11 cases to their successful conclusion. Moreover, this process would eliminate the need for claims estimation or 'hibernating' these cases until the completion of the pending Arbitration-in each case, paths that might jeopardize the Debtors' ultimate viability as a going concern."

This extension motion is due for a Feb. 18 court hearing.

This article was republished with permission from

 

 

 

 

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