Burgess BioPower files Chapter 11 plan and disclosure statement

By Sarah Lizee

Olympia, Wash., March 12 – Burgess BioPower, LLC filed a Chapter 11 plan and disclosure statement Monday with the U.S. Bankruptcy Court for the District of Delaware.

As a reminder, Burgess’ biomass power plant in New Hampshire supplied power to Public Service Co. of New Hampshire, doing business as Eversource Energy, through a power purchase agreement (PPA).

Burgess claims Eversource materially breached the PPA by improperly withholding more than $3.6 million from the debtors, cutting off nearly all of their revenue while continuing to consume the debtors’ power.

The debtors terminated the PPA, and now seek to sell power through other channels while effecting an orderly restructuring for the benefit of stakeholders.

Burgess announced in February that it had reached a restructuring support agreement with its senior secured noteholders that provides for ongoing operations of the debtors’ enterprise, aims to pay all trade creditors in full, and provides a path to emergence.

The company’s prepetition capital structure includes $57 million of 7% senior secured series A notes due 2031 issued by Berlin Station, $93 million of 7˝% senior secured series B notes due 2031 and $50 million of senior secured floating-rate notes due 2022. As of the petition date, about $115 million of the notes remain outstanding.

The notes were originally issued and continue to be held by a group of insurance companies including Prudential Insurance Co. of America, Pruco Life Insurance Co., Prudential Legacy Insurance Co. of New Jersey, Pacific Life Insurance Co., Pacific Life & Annuity Co., Aviva Life and Annuity Co. and Royal Neighbors of America.

The notes are secured by a continuing lien and security interest on all current and subsequently acquired real and personal property of the debtors, including the power plant.

The RSA includes a toggle feature that provides for a sale transaction or a debt-for-equity swap, by which the senior secured noteholders would become the owners of the reorganized debtors.

The plan provides for payment in full of all allowed administrative expense claims, allowed priority claims and any allowed secured claims.

In addition, unsecured creditors of Burgess BioPower will receive 100% of their allowed claims on the effective date up to a cap of $250,000.

Holders of subordinated note claims are expected to receive nothing under the plan.

Unsecured creditors of debtor Berlin Station would receive no distribution on account of their allowed claims.

The company is hoping for a May 21 confirmation hearing.

The Berlin, N.H.-based biomass power plant company filed bankruptcy on Feb. 9 under Chapter 11 case number 24-10235.

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