Longview Power confirmed reorganization plan in effect as of April 13

By Kali Hays

New York, April 14 – Longview Power, LLC’s Chapter 11 plan or reorganization became effective on April 13, according to a Monday notice with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, the court confirmed the plan on March 16 and approved $275 million of exit financing to provide for distributions under the plan, funding to complete repairs to the Longview Power Facility, and “ample” working capital.

Comprised of a $250 million term loan with a six-year maturity and a $25 million revolving credit facility with a five-year maturity, the financing is being provided by Morgan Stanley Senior Funding, Inc., KKR Capital Markets LLC and Third Avenue Trust.

The amended plan includes the company’s recently approved settlement with First American Title Insurance Co. and previous contractors Kvaerner North American Construction Inc. and Siemens Energy, Inc., which includes agreements from the settling parties to support Longview’s reorganization.

Longview said the interlocking settlement agreements with First American, Kvaerner and Siemens resolve the status of the companies’ asserted rights to title policy proceeds available under a $775 million First American title insurance policy, more than $335 million of mechanics’ liens asserted by the contractors in connection with the Longview Power facility and related properties and pending state court actions seeking enforcement of those liens, a pending lien priority action filed by First American and mutual claims.

The settlements include a $12.5 million cash contribution by Siemens and its agreement to take on repairs, technical services and related warranties for the turbine generator portion of the Longview Power facility at no cost to the Longview debtors.

Plan terms

Treatment of creditors under the amended plan include the following:

• Holders of other secured claims will have the option to be paid in full in cash or have an allowed claim reinstated;

• Holders of other priority claims will receive full payment in cash;

• Holders of Longview credit agreement claims will receive a proportionate distribution of equity and to the extent applicable cash payment;

• Holders of general unsecured claims that vote in favor of the plan will receive cash payment equal to the lesser of their proportionate share of the unsecured creditor cash pool and 22.07% of an allowed claim.

General unsecured claimants that vote to reject the plan will receive payment equal to the lesser of their proportionate share of the unsecured creditor cash pool and 5.52% of an allowed claim;

• Holders of intercompany claims and/or interests will either have their claims reinstated with the reorganized company or the claims will be canceled and they will receive no distribution; and

• Holders of existing interests in the company will receive no distribution as all interests will be canceled on the plan effective date.

Longview, an integrated power generation enterprise based in Maidsville, W.Va., filed for bankruptcy on Aug. 30, 2013. The Chapter 11 case number is 13-12211.

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