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GenOn Energy Distributions of Funds Sought

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GenOn Energy filed with the U.S. Bankruptcy Court a motion for entry of an order authorizing interim distributions in respect of certain allowed unsecured claims under the Plan and Confirmation Order; and establishing related claims estimates. The motion explains, “The Debtors continue to achieve significant milestones in furtherance of implementing the Plan and maximizing value for the benefit of their stakeholders….After receiving the aggregate expected Hunterstown and Canal Sale Proceeds, and making the final payment on account of Allowed GAG Notes Claims, the Debtors project more than $800 million of available cash, substantially in excess of what the Debtors believe is necessary or prudent to operate their businesses.  The Debtors anticipate distributing and/or reserving several hundred million dollars if the Court grants the relief requested hereunder.  Accordingly—and out of an abundance of caution—the Debtors seek to modify the Plan and Confirmation Order—to the extent required—to provide for, among other things, express authority for the Debtors to make one or more interim distributions to Holders of Allowed GenOn Notes Claims and Holders of Allowed General Unsecured Claims out of excess cash that the Debtors determine in their business judgment will not be needed to fund their business or satisfy Claims. Although the Plan explicitly authorizes the Debtors to make payments or distributions pursuant to the Plan in their discretion…the Debtors seek to modify the Plan to expressly provide for one or more interim Cash distributions funded by Sale Proceeds and otherwise available Cash to Holders of such Allowed Claims, which Claims are summarized below: Type of Unsecured Claims of GenOn Notes Claims (Class 4), with number of claims of 3, the asserted amount is $1,875,363,362.29; for General Unsecured Claims (Class 6) with number of claims of 1205, the asserted amount is $77,408,608.317….Assuming timely consummation of the Canal sale transaction, the Debtors expect to have sufficient cash on hand to fund interim distributions to holders of Allowed GenOn Notes Claims and Allowed General Unsecured Claims in an aggregate amount of up to $630 million. If the Court grants the relief requested hereunder, the Debtors anticipate making near-term distributions of approximately $30 million on account of approximately 1,100 Allowed General Unsecured Claims, in full and final satisfaction of such Claims. The balance of such interim distributions would be paid to Holders of Allowed GenOn Notes Claims….As of the date hereof, there are approximately 1,211 General Unsecured Claims asserting more than $77 million in liquidated amounts. This aggregate amount includes Claims that have been Allowed, but also includes Claims that have not yet been Allowed pursuant to the terms of the Plan and, thus, remain Disputed. More than 1,600 Proofs of Claim, asserting Claims in excess of $3.4 billion, were timely filed against the Debtors….The net effect of such settlements and claims administration reduced the aggregate face amount of liquidated General Unsecured Claims eligible for Cash recoveries to approximately $77 million. And of this claims pool, the Debtors estimate that approximately $31 million constitutes Allowed General Unsecured Claims. Additionally, there are approximately 230 General Unsecured Claims that were filed in a partially or wholly unliquidated, contingent, or zero-dollar amount.” The Court scheduled a July 11 hearing to consider the distribution motion.

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