By Jacqueline Palank
Edison Mission Energy filed its plan to pay its creditors from
the proceeds of its proposed $2.6 billion sale to NRG Energy Inc.
(NRG)
The plan, filed Friday with the U.S. Bankruptcy Court in
Chicago, carries the support of the official committee representing
Edison Mission's unsecured creditors as well as the holders of
about 75% of $3.7 billion in unsecured bond debt.
The plan centers around Edison Mission's sale to NRG Energy,
which has offered to pay $2.285 billion in cash and $350 million in
stock, subject to any higher offers that come in over the next few
weeks.
Edison Mission will use the sale proceeds, as well as cash on
hand, to pay the bondholders and other unsecured creditors.
In addition to receiving cash, the bondholders and other
unsecured creditors may also share in the company's new common
shares or other interests. Certain bondholders and unsecured
creditors will also get to appoint three directors on Edison
Mission's five-person board.
The plan proposes to cancel Edison Mission's existing shares,
and holders aren't expected to receive any payment.
An additional key component of the plan would preserve legal
claims against Edison Mission's publicly traded parent, Edison
International (EIX). Edison Mission and its unsecured creditors
have vied for the right to sue the parent, which they have accused
of siphoning hundreds of millions of dollars from Edison Mission
before the subsidiary's Chapter 11 filing.
Edison International, which isn't under court protection, has
vowed to fight any lawsuit and says the claims lack merit.
Edison Mission is asking the court to review an outline of the
plan, called a disclosure statement, at a Dec. 18 hearing. If the
court finds the document contains enough information about the
plan's terms, then Edison Mission's creditors will be able to start
voting on the plan.
Edison Mission hopes to wrap up voting by the end of January and
return to bankruptcy court in mid-February for a hearing on the
plan itself.
Edison Mission generates energy at about 40 coal, wind and gas
facilities in 12 states. It sought Chapter 11 protection last
December.
(Dow Jones Daily Bankruptcy Review covers news about distressed
companies and those under bankruptcy protection. Go to
http://dbr.dowjones.com)
Write to Jacqueline Palank at jacqueline.palank@wsj.com.
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