Southern Montana stipulation order extends deadline for conversion motion response

By Lisa Kerner

Charlotte, N.C., Jan. 16 - Southern Montana Electric Generation and Transmission Cooperative Inc. and certain members and noteholders agreed to a stipulation for temporary stay and for additional extension of the deadline to respond to the motion to convert the company's bankruptcy case to Chapter 7 from Chapter 11.

The U.S. Bankruptcy Court for the District of Montana approved the stipulation, which extends the deadline to Feb. 3 from Jan. 17, according to a court filing.

As previously reported, members Fergus Electric Cooperative, Inc. and Beartooth Electric Cooperative, Inc. requested the case conversion.

Fergus and Beartooth said no plan has been confirmed in Southern Montana Electric's Chapter 11 case and, while the court "reluctantly" approved the former trustee's disclosure statement, that document has become dated.

Fergus and Beartooth said the company intends to move to strike it and the trustee's plan, meaning "there is effectively no approved disclosure statement."

In addition, the cooperative members said Southern Montana's noteholders and trustees and their professionals billed the estate for more than $6 million and the noteholders have received tens of millions in adequate protection.

If the court denies the conversion motion, Fergus and Beartooth said they will ask it to confirm the plan of liquidation proposed by the cooperative members.

Southern Montana filed for bankruptcy on Oct. 21, 2011. The Billings, Mont.-based cooperative's Chapter 11 case number is 11-62031.

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