Heritage Power files Chapter 11 plan and disclosure statement

By Sarah Lizee

Olympia, Wash., July 18 – Heritage Power LLC filed a Chapter 11 plan and related disclosure statement on Monday with the U.S. Bankruptcy Court for the Southern District of Texas.

At the heart of the plan is a restructuring support agreement entered in January with parent company GenOn Holdings and consenting lenders.

The plan seeks to right-size the debtors’ balance sheet by equitizing first-lien secured claims and restructuring the debtors’ business in a way that maximizes recovery to all creditors while ensuring that the debtors remain a financially strong and competitive enterprise upon emergence.

First-lien claimholders will have a chance to participate in an exit facility as well.

Under the plan, other secured claims, other priority claims and convenience claims are expected to be paid in full.

Holders of first-lien secured claims will receive their pro rata share of the first-lien distribution, which includes new equity interests (subject to dilution by any new equity interests issued as exit facility participation consideration, as a backstop consideration, or under any management incentive plan) and the exit facility participation consideration. This is expected to result in a recovery of about 57.6%.

Holders of general unsecured claims will receive their pro rata share of a cash pool of $1 million. This is expected to lead to a recovery of about 0.346%.

Intercompany claims will be adjusted, reinstated or canceled.

Subordinated claims will be canceled with no recovery.

Intercompany interests will be adjusted, reinstated or canceled.

Existing equity interests will be canceled with no recovery to holders.

A hearing on approval of the disclosure statement is scheduled for Aug. 22.

The company is hoping for an Oct. 4 confirmation hearing.

Heritage Power is a Houston-based owner of natural gas and oil-fueled power generation facilities. The company filed bankruptcy on Jan. 24 under Chapter 11 case number 23-90032.

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