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USEC Chapter 11 Petition, Plan Filed

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USEC filed for Chapter 11 protection with the U.S. Bankruptcy Court in the District of Delaware, case number 14-10475. The Company, which provides low-enriched uranium, is represented by D.J. Baker of Latham & Watkins and Mark D. Collins of Richards, Layton & Finger. According to documents filed with the Court, USEC commenced this bankruptcy with the support of holders of more than 65% in principal amount of its convertible note debt as well as two holders – Babcock and Wilcox Investment and Toshiba America Nuclear Energy – of its preferred stock interest. Concurrent with the petition, the Company also filed a Prepackaged Plan of Reorganization and related Disclosure Statement. USEC explains, “Through the Plan, the Debtor is attempting to implement a financial restructuring designed to reduce its outstanding indebtedness and strengthen its balance sheet, thereby enabling it to emerge from Chapter 11 on a financial footing that is expected to improve its prospects for later achieving certain strategic initiatives that are essential to its long-term viability. The proposed restructuring is focused on (a) convertible note debt maturing in October 2014, in the principal amount of $530 million, (b) preferred stock obligations of approximately $113.9 million, and (c) common stock holdings. The Debtor’s priority, secured and general unsecured obligations are not impaired by the restructuring.” Explaining the causes of this Chapter 11 filing, USEC states, “…the Company’s business is in a state of significant transition as it moves from the gaseous diffusion technology employed for more than 60 years to a modern, cost-effective gas centrifuge technology. Managing this transition has been made more challenging by current enrichment market conditions.” USEC’s most recent Annual Report cites total assets of $2.27 billion; however, the Chapter 11 petition asset figure is just $70 million.

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