Empire Generating: Ares and Starwood seek stay of sale, plan orders

By Caroline Salls

Pittsburgh, Oct. 17 – Empire Generating Co., LLC creditors ASSF IV AIV B Holdings III, LP, AEIF Trade, LLC (Ares) and SPTIF Parent, LLC (Starwood) are asking the U.S. Bankruptcy Court for the Southern District of New York to stay orders approving the sale of membership interests in Empire Gen Holdings, LLC and confirming the company’s plan of reorganization pending outcome of an appeal.

Ares and Starwood said Empire Generating president and chief executive officer Garrick Venteicher admitted that the company was aiming to avoid having them vote on a Chapter 11 plan.

The creditors said they stand to receive under the plan equity in an entity that is worth substantially less than the amount of their secured debt. As a result, Ares and Starwood said they should legally be entitled to vote on the plan.

“Despite appellants’ right to vote on this reorganization, debtors, working with majority lender Black Diamond Capital Management, LLC, unlawfully seek to sideline appellants through an overvalued, one-sided and misused credit bid,” the stay motion said.

Ares and Starwood said they know the bankruptcy court disagrees with them on their legal rights, but they feel their appeal will be successful.

Empire Generating is the owner of a large natural-gas fired power plant in Rensselaer, N.Y. It filed for bankruptcy on May 9 under Chapter 11. The case number is 19-23007.

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