Mirant's reorganization plan confirmed; New York units left in bankruptcy due to property tax issues

By E. Janene Geiss

Philadelphia, Dec. 2 - Mirant Corp. announced that its Chapter 11 plan of reorganization was confirmed Thursday by the U.S. Bankruptcy Court for the Northern District of Texas.

The plan satisfied all of the requirements for confirmation and an order is expected to be formally entered Dec. 8, according to a Friday news release and confirmed by Sandy Chonody, courtroom deputy for presiding judge D. Michael Lynn.

The company said it now hopes to emerge from Chapter 11 near the end of the year.

The plan converts nearly $7 billion of debt and liabilities into common stock of the reorganized company, reinstates $1.7 billion of debt at the company's Mirant Americas Generation, LLC subsidiary and implements settlements between the company and a number of its major constituencies, including the financers of the company's Mirant Mid-Atlantic, LLC (MIRMA) subsidiary, officials said.

The MIRMA settlement dictates the timing of the confirmation order's entry and contemplates a Dec. 9 hearing to address any issues that may be raised with respect to the settlement with holders of MIRMA's pass-through certificate holders, officials said.

In connection with the plan confirmation, Mirant said it has elected to leave its New York subsidiaries in Chapter 11 pending the outcome of currently incomplete settlement negotiations with certain New York taxing authorities regarding Mirant's efforts to recover past overpayments of real property tax.

The plan will have no impact on Mirant's Caribbean and Philippine operations, which were not part of the Chapter 11 proceedings, officials said.

"Importantly, the plan's de-leveraging of Mirant's balance sheet positions the company to be a strong competitor in the merchant energy sector," Edward R. Muller, Mirant chairman and chief executive officer, said in the release.

Mirant said it expects to complete its $2.3 billion exit financing later this month, and to begin making plan distributions to creditors and shareholders soon after emergence.

The plan was filed in January 2005. The court described the end result of the case as "extraordinary" given its size and complexity, and the value being returned to creditors and shareholders, Mirant officials said in the release.

Mirant, an Atlanta-based power company, filed for bankruptcy July 14, 2003. Its Chapter 11 case number is 03-46590.

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