U.S. Bank National Association filed with the U.S. Bankruptcy Court an objection to GenOn Energy’s Third Amended Joint Chapter 11 Plan of Reorganization.
The objection asserts, “By virtue of filing of an amended plan and related plan supplement, the Debtors purport to have filed a motion pursuant to Bankruptcy Rule 9019 to approve a so-called ‘GenMA Settlement.’ These documents were filed late in the day on Sunday, December 10, 2017, with the apparent expectation that such motion is to be heard at a 9:00 a.m. hearing on Tuesday morning….To suggest that the changes made to the plan are non-material, which it is not clear the Debtors are even suggesting, would be illogical. A materially revised plan cannot be approved on less than 48 hours’ notice….Inherent in the concept of a settlement is the agreement among the parties. The Trustee, a ‘GenMa Settlement Party’ as defined in the Third Amended Plan, has not agreed to the GenMA Settlement. Accordingly, there is no settlement to approve.”
In addition, “The Trustee has at least two substantive problems with the GenMA Settlement as described on the Term Sheet. First, it characterizes the absence of a Make-Whole Premium as a concession by the Trustee. The understanding of the Trustee is that the Owner Lessors are going to avail themselves of a provision in the Indentures, Section 2.10, which permits a purchase of the Lessor Notes without a Make-Whole Premium if certain conditions are met. The Trustee has no objection to such a purchase if such conditions are in fact met. Otherwise, pursuant to Section 2.11(d) of the Indentures, any optional redemption requires the payment of a Make Whole Premium. The Trustee cannot agree a waiver of the Make-Whole Premium as part of an optional redemption without the consent of Certificate holders. Second, the Trustee will only agree to the GenMA Settlement if it is clarified that GenMA’s obligation to indemnify the Indenture Trustees and Pass Through Trustees under Sections 10.1 and 16.6 of each of the Participation Agreements survives the consummation of such settlement.”
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