Stoneway Capital seeks approval of settlements with Siemens Energy

By Sarah Lizee

Olympia, Wash., Jan. 25 – Stoneway Capital Ltd. is seeking approval of two settlement agreements with Siemens Energy, Inc. and its affiliates that would resolve certain disputes and other contract-related issues and claims between the parties, according to a motion filed Tuesday with the U.S. Bankruptcy Court for the Southern District of New York.

For nearly two years, Stoneway and Siemens have been engaged in litigation and arbitration regarding contract disputes in connection with the construction of generation facilities operated by the debtors’ Argentine operating subsidiaries.

While the Siemens arbitration was ongoing, the Siemens Energy entities remained critical vendors to Stoneway through a series of agreements relating to the maintenance of the power plants operated by the Argentine operating subsidiaries and the turbines owned by Stoneway and leased to the Argentine operating subsidiaries.

Stoneway said that, rather than prolonging the Siemens arbitration further, which would divert significant time and resources that would be focused more profitably on the debtors’ restructuring and emergence, and in the interest of maintaining their ongoing business relationship, the parties have reached a consensual resolution of their differences, which is reflected in the settlement agreements.

The settlement agreements comprise two separate but interdependent agreements.

The first is an arbitration settlement agreement to resolve all claims at issue in the Siemens arbitration, including, among other things, the payment by Stoneway of $11 million.

The second agreement settles open contract issues and all remaining claims filed by the Siemens Energy entities, through the assumption of certain agreements and the payment of cure costs.

To facilitate the settlement, Stoneway is seeking authority to make the settlement payment and cure payment from a bank account at UMB Bank, NA.

Stoneway said the settlement is supported by the debtors’ major creditor constituencies, resolves over $133 million of filed claims against the debtors’ estates, and provides for the consensual assumption of contracts that are key to the debtors’ business.

Moreover, resolution of the matter will allow the debtors’ fiduciaries and professionals to direct their full efforts toward confirming a consensual reorganization plan in a timely manner, the company said.

A hearing is scheduled for Feb. 17.

Stoneway is a privately held New Brunswick, Canada, company based in Buenos Aires and established in 2016 for the purpose of constructing, owning and operating power plants to provide electricity to the wholesale electricity market in Argentina through indirect subsidiaries. The company filed bankruptcy on April 7, 2021 under Chapter 11 case number 21-10646.

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