FirstEnergy Solutions Corp. Reaches a Restructuring Support Agreement with Key Creditors
Davis Polk advised an ad hoc group of creditors holding approximately $300 million in power purchase agreement rejection damages and other claims (the “FES Creditor Group”) in connection with the execution of a restructuring support agreement (“RSA”) among FirstEnergy Solutions, the official committee of unsecured creditors and two creditor groups representing a majority in aggregate amount of FirstEnergy Solutions’ funded indebtedness and sale-leaseback certificates. The RSA contemplates a global settlement of various claims and causes of action, including settlements regarding the treatment of inter-debtor claims and the allocation of settlement consideration from parent company FirstEnergy Corp., which was approved by the bankruptcy court on September 26, 2018. The RSA will form the basis of a plan of reorganization that is expected to be filed with the United States Bankruptcy Court for the Northern District of Ohio in the coming weeks.
Under the contemplated plan of reorganization, FirstEnergy Solutions would emerge from bankruptcy as a fully integrated independent power producer focused on maximizing the operating and financial synergies of its retail, nuclear and fossil generating assets.
The Davis Polk restructuring team includes partner Darren S. Klein, counsel Natasha Tsiouris and associates Michael Pera and James A. Eland. Partner Elliot Moskowitz and associate Deborah S. Mazer are providing litigation advice. Partner Stephen Salmon is advising on corporate issues. Partner Lucy W. Farr and associate M. Jared Sanders are advising on tax issues. Members of the Davis Polk team are based in the New York and Northern California offices.
Houlihan Lokey is acting as financial adviser to the FES Creditor Group.