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Mirant creditors to receive payments from lawsuit settlement
By Caroline Salls
Pittsburgh, April 2 - Mirant Corp. will be reimbursed funds it provided to MC Asset Recovery, LLC as part of a settlement that resolves claims asserted against Southern Co. by MC Asset Recovery in a pending lawsuit, according to an 8-K filed Thursday with the Securities and Exchange Commission.
Under the settlement, Southern will pay $202 million to MC Asset Recovery.
According to the filing, MC Asset Recovery is a subsidiary of Mirant created when the latter emerged from bankruptcy in January 2006 to pursue certain claims on behalf of Mirant's former creditors and equityholders.
Under Mirant's Chapter 11 plan of reorganization, the company and its subsidiaries that were in bankruptcy transferred various causes of action to MC Asset Recovery, including the claims asserted in the Southern Co. litigation.
The plan required Mirant to make contributions to MC Asset Recovery to pay professional fees and other costs and called for Mirant to be reimbursed for the funding from any recoveries obtained by MC Asset Recovery.
Under the plan, any cash recoveries received by MC Asset Recovery from the claims transferred to it, net of prosecution costs, are to be distributed to Mirant's unsecured creditors and equityholders.
Once the settlement is complete, Mirant said it expects to receive reimbursement of about $51 million for the funds it has provided to MC Asset Recovery, while the subsidiary is expected to use some of the funds it receives under the settlement to pay fees and other expenses not previously funded by Mirant.
Mirant's plan allocates 50% of the remainder of the amount recovered by MC Asset Recovery to holders of Mirant's unsecured claims and 50% to holders of its equity interests.
Mirant is an Atlanta-based energy company.
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