FirstEnergy / Utilities

Judge puts up major roadblock in FirstEnergy Solutions’ bankruptcy case

FirstEnergy wants to detach from its subsidiary, FirstEnergy Solutions, which recently filed for bankruptcy. One judge says they are out to ‘abuse the bankruptcy system.’

“State and federal regulators, however, seem to not have been heavily considered, or at least not brought to the table, and over the past few weeks have objected. They’ve argued in filings that it’s not the role of a bankruptcy court to relieve parent FirstEnergy of liability for environmental damage and potential cleanup from plants it has historically owned – even calling the plan a ‘scheme‘ meant to ‘abuse the bankruptcy system,’ according to an article by the Plain Dealer’s recently departed and well-respected energy reporter John Funk, who had been following the case closely.

Koschik apparently agrees. Now the companies can’t use or send out the disclosure statement that would have told creditors where they stood and what to expect, and helped clear the way for the case to resolve with the two companies separated.

FES issued a news release late on April 4, saying it will issue a revised disclosure statement to the court.

‘Working with our advisers, we have already initiated action to address the court’s ruling and will submit a new request to have the disclosure statement approved in a timely manner,’ John Judge, CEO and president of FES, said in the release. ‘The company remains focused on a plan that will significantly strengthen its financial position and allow it to exit Chapter 11 in 2019.'”

— Dan Shingler, Crain’s Cleveland Business

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