GenOn asks court to enforce key settlement in plan of reorganization

By Caroline Salls

Pittsburgh, Oct. 22 – GenOn Energy, Inc. is asking the U.S. Bankruptcy Court for the Southern District of Texas to enforce a settlement that is a key component of its confirmed plan of reorganization, according to a motion filed Friday with the court.

The company said the settlement it reached with GenOn Mid-Atlantic, LLC (GenMa) and its leveraged lease counterparts “resolved contentious litigation” and is a “cornerstone of the debtors’ Chapter 11 plan of reorganization.”

GenOn said the settlement obligates GenMa to deliver a recorded deed for its Chalk Point power plant in Prince George’s County, Md., but the county and the Maryland Department of Taxation are refusing to record the deed unless GenMa pays $6.7 million in stamp taxes.

“GenMa will breach its obligations under the GenMa settlement, the participation agreements and the confirmation order if it does not timely deliver the recorded deed,” the motion said. “The debtors and GenMa submit that Section 1146(a) of the Bankruptcy Code applies to this transfer and the county is therefore required to record the deed without regard to recording and transfer taxes.”

As previously reported, the GenOn plan was confirmed on Dec. 12, 2017 but has not yet taken effect.

A hearing is scheduled for Nov. 13.

GenOn, a Princeton, N.J.-based power producer, filed for bankruptcy on June 14, 2017. The Chapter 11 case number is 17-33695.

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