Edison Mission Energy, the independent power producer, won bankruptcy court approval of a description of the terms of a reorganization plan that includes an asset sale to NRG Energy Inc., a company lawyer said.
U.S. Bankruptcy Judge Jacqueline Cox in Chicago approved the so-called disclosure statement today, Seth Gastwirth, the lawyer for Edison Mission, said in an e-mail. Creditors will now be asked to vote on the plan. The judge’s decision couldn’t immediately be confirmed from court records.
An objection to the plan raised by Edison International Inc. (EIX:US), the bankrupt company’s parent, was resolved prior to today’s hearing, according to court papers.
Creditors will now be asked to vote on the plan, which is supported by “all of the debtor’s major stakeholders,” including the official creditors’ committee and holders of 45 percent of the senior unsecured notes, Edison Mission has said in court papers.
Edison International had said the plan could require it to make tax elections that would hurt the parent in order to benefit the bankrupt unit. The plan didn’t describe the value of tax attributes that the bankrupt unit would get or why they should override the parent’s legal and fiduciary obligations, Edison International said.
NRG (NRG:US), based in Princeton, New Jersey, will pay $2.64 billion, including $2.29 billion in cash and $350 million in stock for Edison Mission, which has been in bankruptcy for a year.
Under the plan, secured creditors and unsecured creditors of the operating companies with claims of as much as $678 million would be paid in full.
Unsecured creditors of Edison Mission with $3.86 billion in claims would split what remains of the purchase price and the NRG stock, resulting in a recovery ranging from 57.3 percent to 100 percent. Under a liquidation, Edison Mission estimated, those creditors would recover 46.8 percent at most.
Subordinated creditors get nothing under the plan.
The case is Edison Mission Energy, 12-49219, U.S. Bankruptcy Court, Northern District Illinois (Chicago).
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