Edison Mission Energy filed with the U.S. Bankruptcy Court a motion for entry of an order (a) authorizing the termination of retiree benefits and (b) granting related relief. The motion explains, “The Sponsoring Debtors currently provide post-employment benefits other than pensions (collectively, the “Retiree Benefits”) to certain retirees and retirement-eligible employees, as well as their dependents and surviving spouses. Historically, the Sponsoring Debtors have been able to fund the Retiree Benefits with revenues from the Sponsoring Debtors’ power generating assets. Soon this will no longer be possible. As part of the Plan, all or substantially all of the Sponsoring Debtors (and/or their assets) will be sold to NRG. Following confirmation, the Sponsoring Debtors will lack revenue generating operations that would allow them to continue to fund the Retiree Benefits, currently estimated to exceed $62.5 million on a present value basis. In addition, under the Purchase Agreement…NRG is not assuming responsibility for the Retiree Benefits. Following confirmation of the Plan, the Sponsoring Debtors also will be unable to administer the Retiree Benefits. For the past 27 years and continuing through today, the Debtors’ corporate parent, Edison International (‘EIX’) has been responsible for administering the Retiree Benefits. This arrangement will end following confirmation of the Plan. After confirmation, EME will not have the resources, administrative support, personnel, or experience that would allow them to continue to administer the Retiree Benefits following Plan confirmation into the future. Accordingly, the Sponsoring Debtors have concluded, as a sound exercise of their business judgment, to take necessary corporate actions to terminate the Retiree Benefits effective immediately after the effective date of the Plan.”
About Brandy Chetsas
Brandy L. Chetsas is editor in chief at Bankrupt Company News. She joined New Generation Research, Inc. in 1998. As Director of Strategic Content, she leverages 20+ years of communications and project management experience for the distressed investing sector–with particular expertise on corporate restructurings via Chapter 11. Brandy began her career writing for a law enforcement-related publication and teaching English courses at numerous colleges in the U.S. and abroad.