Information for Creditors of Footprint Power Salem Harbor & Highstar
Jointly Administered Under Case Number 22-10239 in the United States Bankruptcy Court for the District of Delaware
DEBTORS’ BUSINESS
The Debtor company filed bankruptcy under its former names, Footprint Power and Highstar Footprint. However, the company had been operating under a license agreement, through which it was licensing the name “Footprint Power” and its logo. The company licensing the name to the Debtor has revoked the agreement, so the Debtor is changing its name to Salem Harbor Power and Highstar Salem Harbor.
Salem Harbor operates a 674 MW natural gas-fired combined-cycle electric power plant in Salem, MA, on the Salem harbor. The facility began operations in mid-2018 when construction was finished on the new plant, which replaced an old coal-fired plant in the same location.
DEBTOR WILL HAVE NEW OPERATORS
Through the bankruptcy case, the Debtors will reorganize in one of two ways. Either the Debtors will complete a standalone restructuring with 100% of the equity in the company being delivered to secured creditors or the Debtors will sell their business as a going concern. The Debtors will take whichever path will provide the best return to creditors. Either way, they will emerge from bankruptcy with new owners.
In order to accomplish its goals in a timely manner, the Debtors have agreed to a Restructuring Support Agreement, or RSA, with is secured creditors. Under the RSA, the Debtors have agreed to move through bankruptcy on an expedited schedule, which includes filing a proposed plan of reorganization within the first month of the case.
POTENTIAL OUTCOMES FOR UNSECURED CREDITORS
The main reason for the bankruptcy filing is a judgment entered against the Debtors for over $237 million. That judgment will have priority of payment and will make it difficult for unsecured creditors to be paid in full. In fact, the RSA states that unsecured creditors will be paid their pro rata share of some unknown amount, but anticipates that they will get nothing by assuming that unsecured creditors will reject the plan.
Unsecured creditors do not simply have to accept this treatment. They are permitted to make their voices heard in the bankruptcy and negotiate for better payment terms. If you have any questions about this case or unsecured creditor participation in Chapter 11 bankruptcies, please reach out to PRLT for a complimentary consultation.
PRLT does not represent Footprint Power Salem Harbor Development LP or any of its affiliated Debtors. The content on this page is provided for informational purposes only. Nothing on this page or this website creates an attorney/client relationship between you and PRLT. Nothing on this page is legal advice. If you have any questions about the Footprint Power/Salem Harbor jointly administered bankruptcy case or anything discussed on this page, please contact us.