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NorthWestern obtains court approval of global settlement of litigation with Magten, Law Debenture Trust
By Jennifer Lanning Drey
Portland, Ore., July 10 - NorthWestern Corp. obtained court approval of a settlement with Magten Asset Management, Law Debenture Trust Co. of New York and the company's plan committee that resolves litigation related to claims of holders of quarterly income preferred securities (Quips) in NorthWestern's Chapter 11 bankruptcy case, according to a company news release.
Under the settlement, Magten, Law Debenture and the holders of the Quips will collectively receive a cash payment of $23 million.
The cash payment will be funded principally by NorthWestern's repurchase of stock held in the disputed claims reserve established under the company's plan of reorganization.
Additionally, NorthWestern will receive a reimbursement of previously incurred legal fees and expenses of $4 million under separate agreements for which court approval was not needed.
After the distributions under the settlement agreement have been completed, there will be a supplemental distribution of all of the remaining assets in the disputed claims reserve to unsecured creditors and debt holders in class 7 and class 9 under the plan, other than holders of the Quips.
The value of the supplemental distribution has not yet been determined.
"This settlement resolves the last major claim for our 2003 Chapter 11 bankruptcy case, and we will now be able to put closure on that piece of our past and focus on providing exceptional value for our shareholders in the future," Michael J. Hanson, president and chief executive officer of NorthWestern, said in the release.
NorthWestern, a Sioux Falls, S.D., provider of electricity and natural gas, emerged from Chapter 11 on Nov. 1, 2004.
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