Southern Montana Electric plan to be confirmed; conversion motion moot

By Caroline Salls

Pittsburgh, June 13 – Southern Montana Electric Generation and Transmission Cooperative Inc.’s plan of reorganization will be confirmed, according to an entry made Friday on the docket for the company’s bankruptcy case in the U.S. Bankruptcy Court for the District of Montana.

The docket entry said the plan would be confirmed upon receipt of a proposed order and supplemental plan documents and agreements.

All plans filed by other parties to Southern Montana’s case are deemed to be withdrawn, and valuation and case conversion motions will be deemed moot.

On June 6, the company received court approval of a stipulation under which holders of general unsecured claims will receive a share of $300,000 in cash in full satisfaction of their claims.

No member of Southern Montana’s cooperative will be entitled to an unsecured claim distribution. Creditor PPL Energy Plus, LLC will only receive distributions under class eight of the plan, and no class four unsecured creditor will be entitled to any distribution for class eight claims.

In addition, all objections to confirmation of the plan filed by Southern Montana’s unsecured creditors committee were deemed to be withdrawn, and the committee and its members will be deemed to have voted to accept the plan.

The court also approved a stipulation on June 11 between the company, its noteholders, indenture trustee and lien claimants.

That stipulation specifies that construction lien claims will be satisfied through an $825,000 cash payment on the plan effective date, an additional $2.5 million payment to be made in four annual installments.

Southern Montana Electric will also pay at least $300,000 to these creditors to satisfy a settlement amount.

Under a separate court order, Southern Montana’s plan must take effect no later than June 27, unless otherwise agreed to by the company, its noteholders and the members.

Southern Montana filed for bankruptcy on Oct. 21, 2011. The Billings, Mont.-based cooperative’s Chapter 11 case number is 11-62031.

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