Mirant: Long-term noteholders unimpaired under plan

By Caroline Salls

Pittsburgh, April 27 - Mirant Corp. said "there is no doubt" that Mirant America's Generation, LLC's long-term noteholders are left unimpaired under its plan of reorganization, according to a response filed Tuesday with the U.S. Bankruptcy Court for the Northern District of Texas.

The omnibus response was to requests filed Monday and Tuesday asking that the noteholders be considered impaired and allowed to vote on the plan.

Mirant America's Generation, LLC's ad hoc committee of bondholders and committee of unsecured creditors said the plan alters the long-term noteholders' legal and contractual rights and not only does not solve defaults under the indenture but triggers new defaults as well.

In its response, Mirant said the objections are "based on a misplaced and, at times, seemingly deliberate misleading mischaracterization of the terms of the indenture and the plan and the law concerning impairment."

Mirant said the objectors' arguments are vague and lack detailed analysis.

"When each particular plan provision is analyzed with specificity against these indenture restrictions, it becomes patently clear that the plan complies in all respects with the terms of the indentures," Mirant said in its response.

"This result should not surprise anyone as the debtors were aware fully of the terms of the indentures when formulating the plan and painstakingly compared each and every plan provisions to the indentures to ensure that the plan achieved this particular objective - to unimpair the MAG long-term noteholders."

The bondholders also said the plan subordinates the long-term notes "to billions of dollars in new debt, fundamentally altering the terms of the long-term noteholders' original economic bargain."

The committee said Monday that the plan also fails to fix defaults under the indenture, including the merger, consolidation and transfer of assets and the issuance of debt and incurrence of liens by the consolidated company.

A hearing will be held April 28.

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

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