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Dynegy Announces Pact to Settle Over $2.5B Claims Against Unit


Dynegy (NYSE: DYN) announced today that it has reached an agreement in principle with creditors holding over $2.5 billion of claims against Dynegy's subsidiary, Dynegy Holdings, LLC. The agreement in principle contemplates the resolution of all disputes, claims and causes of action between DH and Dynegy. The terms of the agreement in principle will be implemented through a settlement agreement to be filed in DH's Chapter 11 case, and in amendments to DH's Chapter 11 plan, which would be subject to a formal creditor vote and confirmation by the bankruptcy court.

Under the agreement in principle, DH's unsecured creditors would receive common equity in the reorganized company in lieu of the new senior secured notes and preferred stock contemplated by the current plan; the cash to be distributed to creditors under the revised plan would be reduced to $200 million; and all disputes relating to the Roseton and Danskammer leases would be resolved by awarding US Bank, as trustee for the trust certificates issued in connection with the leases (the Lease Notes), a fixed allowed unsecured claim. Parties to the proposed agreement include an ad hoc group of holders of DH's senior notes, PSEG, US Bank and certain holders of the Lease Notes. The agreement in principle does not include any holders of DH's $200 million of subordinated capital income securities due 2027 (the Subordinated Notes).

Posted-In: News Financing Legal


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