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Edison Mission looks to terminate $62.5 million in retiree benefits
By Caroline Salls
Pittsburgh, Jan. 9 - Edison Mission Energy requested court approval to terminate retiree benefits, according to a Jan. 8 filing with the U.S. Bankruptcy Court for the Northern District of Illinois.
Specifically, the company said some retiree benefits would be terminated immediately following the effective date of its Chapter 11 plan, while Midwest Generation union retiree benefits would be terminated as of March 31, 2015.
Historically, Edison Mission said the retiree benefits have been funded using revenues from power generating assets.
However, substantially all of the company's assets will be sold, and the Edison Mission debtors will lack revenue generating operations that would allow them to fund the benefits, which are currently estimated at $62.5 million on a present value basis.
In addition, asset purchaser NRG Energy Inc. will not assume responsibility for the retiree benefits.
After confirmation of its Chapter 11 plan, Edison Mission said it will not have the resources, administrative support, personnel or experience to continue to administer the retiree benefits into the future.
Because the retiree benefits are not vested, the company said the Bankruptcy Code's restrictions on a debtor's ability to terminate or modify vested retiree benefits do not apply.
According to the motion, the retiree benefits will be funded for the duration of the Chapter 11 cases.
A hearing is scheduled for Jan. 22.
Edison Mission, a Santa Ana, Calif.-based owner, operator and leaser of a portfolio of electric generating facilities, filed for bankruptcy on Dec. 17, 2012. Its Chapter 11 case number is 12-49219.
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