Judge will wait to sign off on FirstEnergy Solutions bankruptcy emergence
- Aug 24, 2019 12:26 am GMT
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The confirmation of FirstEnergy Solutions' bankruptcy plan has been put on hold until the company reaches a deal with two unions on labor agreements or wins court approval to reject the contracts.
U.S. Bankruptcy Court Alan Koschik said in court in Akron on Wednesday that he was putting off confirmation of the plan until the labor agreements are addressed.
He scheduled a Sept. 10 status conference.
The judge stressed he was not denying confirmation of the plan.
Wednesday marked the second day of a hearing to confirm whether FirstEnergy Solutions, the unregulated power generation arm of Akron-based electric utility FirstEnergy Corp., has met all required bankruptcy code elements.
FirstEnergy Solutions is seeking to emerge from Chapter 11 bankruptcy proceedings as an independent unregulated power generation company; separate from its parent FirstEnergy Corp. FirstEnergy Solutions intends to keep its headquarters in Akron once it exits from bankruptcy, its senior executives have previously said.
FirstEnergy Solutions is the owner of coal plants and nuclear power plants, including the Perry Nuclear Power Plant east of Cleveland and the Davis-Besse Nuclear Power Station, near Toledo, among other facilities
FirstEnergy Solutions said in a statement released Thursday, "We are pleased with the progress made in the hearings, which resolved substantially all non-labor related issues pertaining to confirmation of our Plan."
The company, the statement said, "remains focused on confirming the Plan to exit bankruptcy by the end of 2019."
On Wednesday, Koschik announced his decision to put confirmation on hold after listening to the unions' attorney, Joyce Goldstein, raise objections to the proposed plan.
Goldstein, of Goldstein Gragel LLC in Cleveland, argued in court that federal law requires contracts -- especially labor contracts -- to either be assumed or rejected before a reorganization plan is confirmed.
The unions are Utility Workers Union of American Local 270, which represents roughly 175 workers at the Perry Nuclear Power Plant, and the International Brotherhood of Electrical Workers Local 29, which represents workers at the Beaver Valley Nuclear Power Station outside Pittsburgh.
FirstEnergy Solutions is seeking to cut pensions from the collective bargaining agreements; workers would to have 401(k) retirement savings. plans.
Unions representing workers at the Davis-Besse Nuclear Power Station have separately reached agreements with FirstEnergy Solutions.
Earlier this summer, Ohio legislators approved a bipartisan bill that will give the power generation company as much as $150 million a year from ratepayers to keep open Davis-Besse and Perry. A petition drive has been started to overturn the law, with critics saying it is a bailout.
The law imposes a fee of 85 cents a month on residential customers starting in 2021. They money also will help shore up two coal-burning power plants owned by a consortium of power companies as well, with other money going to solar projects in the state.
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