GenOn Energy (f/k/a RRI Energy) and more than 50 affiliated Debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the Southern District of Texas, lead case number 17-33695. The Company, which owns and operates power generation facilities, is represented by Zack A. Clement of Zach A. Clement PLLC. According to documents filed with the SEC, on June 12, 2017, GenOn Energy, GenOn Americas Generation (GAG) and certain of their directly and indirectly-owned subsidiaries (collectively, “GenOn Entities”) (but not including GenOn Mid-Atlantic) entered into a restructuring support and lock-up agreement (RSA) with NRG Energy, certain holders representing greater than 93% in aggregate principal amount of GenOn Energy’s outstanding senior unsecured notes and certain holders representing greater than 93% in aggregate principal amount of GAG’s outstanding senior unsecured notes signatory thereto. The RSA sets forth, subject to certain conditions, the commitments of the GenOn Entities, NRG Energy and the consenting holders to support certain restructuring and recapitalization transactions with respect to the GenOn Entities’ capital structure.
The RSA and related plan contemplated thereby but not yet filed with the Court, will implement a comprehensive restructuring that, among other things, is expected to delever the GenOn Entities’ balance sheet by approximately $1.75 billion, facilitate GenOn Energy’s transition to a standalone power generation company and consensually resolve potential claims the GenOn Entities may have against NRG Energy in connection with, among other things, the services agreement, dated December 20, 2012 by and between NRG Energy and GenOn Energy.
Among other things, the RSA provides that holders of GenOn Energy notes will receive (i) 100% of the equity of reorganized GenOn Energy, together with the other consideration contemplated by the plan, subject to dilution by the management incentive plan to be adopted by reorganized GenOn Energy upon emergence, (ii) if such noteholder has executed the RSA (except as otherwise determined by the GenOn Entities in their sole discretion), such noteholder’s pro rata portion of (a) a cash payment of approximately $75 million and (b) such other cash for distribution as agreed to by the GenOn Entities and the GenOn Energy steering committee and, (iii) subject to certain eligibility restrictions, rights to participate pro rata in the offering of the new notes.
According to documents filed with the SEC, “Through the Chapter 11 Cases, the GenOn Entities will seek to implement the Plan contemplated by the RSA.”
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