Dynegy joint Chapter 11 plan confirmed; emergence expected by Oct. 1

By Caroline Salls

Pittsburgh, Sept. 5 - Dynegy Inc. and Dynegy Holdings, LLC's joint plan of reorganization was confirmed Wednesday by judge Cecelia G. Morris of the U.S. Bankruptcy Court for the Southern District of New York, according to a company news release.

The companies said the confirmation sets the stage for them to emerge from bankruptcy as planned on or before Oct. 1.

Before emergence, Dynegy Holdings will merge with and into Dynegy Inc., with Dynegy Inc. being the surviving company.

According to the release, the plan substantially strengthens Dynegy's balance sheet by converting roughly $4 billion of senior and subordinated debt into equity.

Dynegy said it is seeking to have the common stock and warrants that will be issued under the plan listed on the New York Stock Exchange following emergence.

"Our renewed financial strength and flexibility positions us well in today's challenging power markets," Dynegy president and chief executive officer Robert C. Flexon said in the release.

"We're excited for our future and the combination of our motivated employees, high-quality assets and financial strength provides the foundation for success in the days to come."

Creditor treatment

As previously reported, treatment of creditors under the joint plan will include the following:

• Holders of administrative claims, settling creditor professional fee claims, priority tax claims, priority claims, convenience claims and secured claims will be paid in full;

• Holders of a Dynegy administrative claim will receive a share of a settlement stock pool and warrants;

• Holders of general unsecured claims will receive a share of a class 3 stock pool, allocated facilities sale proceeds and a plan cash payment; and

• Holders of securities claims and equity interests will receive no distribution.

Dynegy filed bankruptcy on July 6 in the U.S. Bankruptcy Court for the Southern District of New York. Dynegy Holdings and four subsidiaries filed for bankruptcy on Nov. 7, 2011. The cases are being administered under case number 11-38111.

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