NorthWestern trustee, investor seek permission to take part in SEC proceedings

By Jeff Pines

Washington, April 30 - If NorthWestern Corp. is subject to the Public Utilities Holding Co. Act, it could spell trouble for the company and trouble for its reorganization plan - and two interested parties want to get involved in the Securities and Exchange Commission proceedings.

NorthWestern obtained an exemption, but Wilmington Trust Co., trustee for some of the company's debt securities, and Harbert Management Corp., an investor, want permission to take part in the SEC proceedings.

They filed a joint request for permission with the U.S. Bankruptcy Court for the District of Delaware Thursday.

According to them, Northwestern's acquisition of Montana Power LLC in 2002 made the company a holding company under the definition of the Public Utilities Holding Co. Act.

The application for an exemption "rested on a highly distorted and misleading recitation of the pertinent facts," they said. NorthWestern argued the Montana power company was providing electricity to its telecommunciations and energy services so its utility operations were incidental and therefore the company was eligible for the exemption, Wilmington and Harbert said.

The problem, they said, is that Sioux City, S.D.-based NorthWestern was really a utility holding company. NorthWestern supplies electricity and natural gas.

Northwestern sold $720 million of senior unsecured debt, which includes 7 7/8% unsecured senior notes due 2007 and 8¾% unsecured senior notes due 2012, and $390 million of senior secured debt after the application.

If the SEC finds the company acted illegally, it could void that debt.

Before the company's disclosure statement can be considered, this question must be resolved, they said.

A May 17 hearing on the motion is scheduled.

NorthWestern filed for Chapter 11 protection in the U.S. Bankruptcy Court in Delaware on Sept. 14. NorthWestern's Chapter 11 case number is 03-12872.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.