Davis Polk Advises an Ad Hoc Group of Creditors in Connection with FirstEnergy Solution Corp. Restructuring
3/16/2020

Davis Polk advised an ad hoc group of creditors holding over $200 million in power purchase agreement rejection damages and other claims (the “FES Creditor Group”) in connection with the chapter 11 cases of FirstEnergy Solutions Corp. and certain of its debtor affiliates (collectively, the “Debtors”). The Debtors’ plan of reorganization (the “Plan”) was confirmed by the Bankruptcy Court for the Northern District of Ohio on October 16, 2019 and became effective on February 27, 2020. The Debtors will emerge from bankruptcy as Energy Harbor Corp.

Under the Plan, unsecured creditors will receive a distribution of newly-issued equity in Energy Harbor Corp. and/or cash based on value allocable to each Debtor entity, and certain secured pollution control note claims against FirstEnergy Nuclear Generation, LLC and FirstEnergy Generation, LLC will be reinstated or paid in full. The Plan also embodied 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 non-debtor parent company FirstEnergy Corp.

Energy Harbor Corp. is an independent power producer and fully integrated retail energy provider with a fleet of reliable generating resources, including substantial carbon-free generation.

The Davis Polk restructuring team included partner Darren S. Klein, counsel Natasha Tsiouris and associate Michael Pera. The corporate team included partner Stephen Salmon. The litigation team included partner Elliot Moskowitz and associate Deborah S. Mazer. The tax team included partner Lucy W. Farr and associate Alexander J. Hendin. Members of the Davis Polk team are based in the New York and Northern California offices.