FirstEnergy / Ohio Utility Bailouts

Judge derails FES plan to exit bankruptcy while lawmakers consider bail-out bills

AKRON — “After presiding over a full day of arguments, the judge this week refused to approve a complicated disclosure statement the company must send to its creditors who will then have the right to approve or reject the company’s plan to re-organize itself, after which the court will still have the final say.

FES’ reorganization plan calls for major creditors to own the company. Unsecured creditors would get cash, but only a fraction of what they are owed. But creditors won’t be able to vote on the plan until the court is satisfied with the company’s disclosure statement.

Koschik also refused to approve an accelerated schedule proposed by FES that would have allowed a vote on the reorganization plan by creditors in April and a hearing on the vote in May.

In bankruptcy reorganization cases, the disclosure statement is supposed to disclose possible problems that could derail the plan.

But the FES statement doesn’t do that, and there are a lot of potential problems, insisted lawyers for the unions representing nuclear plant workers and lawyers representing environmental groups and a number of U.S. attorneys representing federal regulatory agencies, including the NRC, EPA, FERC and the SEC, and lawyers representing state environmental agencies in Ohio and Pennsylvania.”

— John Funk, The Plain Dealer 

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