Heritage Power’s Chapter 11 plan effective as of Nov. 21

By Sarah Lizee

Olympia, Wash., Nov. 22 – Heritage Power LLC’s Chapter 11 plan went into effect on Tuesday, according to a notice filed with the U.S. Bankruptcy Court for the Southern District of Texas.

At the heart of the plan, which was confirmed Oct. 4, is a restructuring support agreement entered in January 2023 with parent company GenOn Holdings and consenting lenders, as previously reported.

The plan seeks to right-size the debtors’ balance sheet by equitizing first-lien secured claims and restructuring the debtors’ business in a way that maximizes recovery to all creditors while ensuring that the debtors remain a financially strong and competitive enterprise upon emergence.

First-lien claimholders will have a chance to participate in a $50 million exit facility as well.

The facility will bear interest at SOFR plus 550 basis points and mature in three years.

Under the plan, other secured claims, other priority claims and convenience claims are expected to be paid in full.

Holders of first-lien secured claims will receive their pro rata share of the first-lien distribution, which includes new equity interests (subject to dilution by any new equity interests issued as exit facility participation consideration, as a backstop consideration, or under any management incentive plan) and the exit facility participation consideration. This is expected to result in a recovery of about 57.6%.

Holders of general unsecured claims will receive their pro rata share of a cash pool of $1 million. This is expected to lead to a recovery of about 0.346%.

Intercompany claims will be adjusted, reinstated or canceled.

Subordinated claims will be canceled with no recovery.

Intercompany interests will be adjusted, reinstated or canceled.

Existing equity interests will be canceled with no recovery to holders.

Heritage Power is a Houston-based owner of natural gas and oil-fueled power generation facilities. The company filed bankruptcy on Jan. 24, 2023 under Chapter 11 case number 23-90032.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.