NRG unit GenOn files for bankruptcy - Smart Energy Decisions

Power Prices, Utilities  -  June 14, 2017

NRG unit GenOn files for bankruptcy protection

Power producer GenOn Energy has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court in Houston.  

The NRG Energy subsidiary owns more than 15 GW of generation across the country and has struggled financially alongside its peers amid sustained low power market prices in recent years. NRG Energy purchased GenOn in 2012 for about $1.7 billion. 

According to a June 14 filing with the SEC, GenOn has proposed a Chapter 11 plan that includes debt reduction of $1.8 billion and an effort to settle claims that NRG Energy was improperly pulling money from the company. The Wall Street Journal reported

Creditors of GenOn have lobbed allegations over the past year that NRG has treated the unit like a piggy bank, siphoning cash away from creditors under a services agreement the benefit of shareholders. A noteholder group sued NRG in December, accusing the Princeton, N.J.-based parent of plundering GenOn’s assets since 2013. Owners of two Maryland power generation plants that lease the facilities to another GenOn unit sued NRG last week, saying the sponsor had raided restricted sources of cash to finance a favorable bankruptcy settlement.

GenOn's proposed bankruptcy plan would release NRG from liability in those claims in exchange for a $261.3 million cash payment — which the WSJ notes is up from a previous $243 million offer —  and handing GenOn over to its creditors, according to a Wednesday securities filing. 

Tags: GenOn, nrg

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