Longview Power LLC and its affiliates, including coal producer Mepco LLC, on Jan. 26 filed a second amended reorganization plan with the U.S. Bankruptcy Court for the District of Delaware.
Longview had recently worked out agreements with major parties to the case, including two contractors that helped it late last decade build its 700-MW (net) Longview power plant in northern West Virginia. That helped clear the way for the filing of this plan, which deals with various creditor claims and allows the financial reorganization of the debtor companies with debt-for-equity financing from financial parties known as the "Backstoppers."
Said the companies' motion to approve the plan: "By this Motion, the Debtors seek the authority to take an affirmative step towards the consummation of their Second Amended Plan and the successful conclusion of these chapter 11 cases. As the Court is aware, after nearly sixteen months of hard-fought litigation in these chapter 11 cases and more than three years of parallel litigation in the Debtors' pending arbitration proceedings, the Debtors entered into separate Settlement Agreements with each of the Contractors and First American to settle their disputes, thereby solving the material overhang to the Debtors' capital structure arising from the Contractors' asserted mechanics' liens and providing a mechanism to implement the comprehensive 'fix' required for the Longview Power Facility. The Foster Wheeler Settlement Agreement was approved by this Court on March 7, 2014, the remaining Settlement Agreements were approved by this Court on January 20, 2015, and the Debtors have filed their Second Amended Plan contemporaneously herewith to continue on their path towards emergence. Importantly, pursuant to the Settlement Agreements, each of the Contractors and First American have agreed to support confirmation of the Second Amended Plan."
The motion added: "Subject to the Court's approval, the Debtors would also propose to set a hearing on confirmation of their Second Amended Plan for March 13, 2015 (or as soon thereafter as may be convenient for the Court), with a continued voting deadline and plan objection deadline of March 9, 2015, as such dates may be extended, with the consent of the Backstoppers, in accordance with the solicitation procedures previously approved by the Court on December 18, 2013 and May 29, 2014. The Debtors respectfully submit that this timeline will provide all parties in interest ample time to review the Second Amended Plan and the Second Disclosure Statement Supplement and to respond accordingly."
In the disclosure statement that accompanied the reorganization plan, the companies said: "The Debtors believe that the Reorganized Debtors will succeed in repairing the Longview Power Facility in accordance with the currently contemplated schedule, including with respect to the repairs contemplated by the terms of the Foster Wheeler Settlement Agreement, the Siemens (NYSE: SI) Settlement Agreement, and the Generator Agreement, which will allow the Longview Power Facility to operate at or near full capacity by the end of the second quarter of 2015. There are risks, however, that such repairs will be unsuccessful, or will take longer than expected, and that the Reorganized Debtors may continue to suffer loss of cash flows due to operational issues at the Longview Power Facility. In such event, the Reorganized Debtors may be unable to restructure their funded debt or be forced to sell all or parts of their business, develop and implement further restructuring plans not contemplated in the Disclosure Statement or this Disclosure Statement Supplement, or become subject to further insolvency proceedings after Consummation of the Second Amended Plan."