Rocky Mountain Power LLC and affiliated companies, involved in power generation in the western U.S., sought Chapter 11 protection from creditors on April 23 at the U.S. Bankruptcy Court for the District of Delaware.
The bankruptcy filing shows that Rocky Mountain Power LLC – not to be confused with an alternate name for PacifiCorp – is based in Hardin, Mont. Affiliates of the company that also sought bankruptcy protection include Bicent Holdings LLC, CEM Energy Services Inc. and Colorado Cogen Operators LLC. On April 24, the judge approved the consolidation of all of these cases into one proceeding.
By far the two leaders on a list in the bankruptcy filing of 30 largest unsecured creditors are: Mezzanine Credit Agreement, Barclays Capital, Agent, $65.5m; and Lea Power Partners LLC, c/o ArcLight Capital Partners LLC, $22m. The rest of the top 30 list includes parties owed less than $1m, including Northwestern Energy and Xcel Energy (NYSE: XEL).
A supporting declaration in the Bicent case said these Chapter 11 filings were pre-arranged with the first- and second-lien lenders to the companies. The idea is to re-work finances and “de-lever” the companies. These bankrupt companies are largely based around 2007 asset purchases from MDU Resources (NYSE: MDU), the filing said. The power generating assets involved in the bankruptcy cases are the 120-MW, coal-fired Hardin power plant in Montana, and the 48-MW, simple cycle, gas-fired San Joaquin power plant in California. The filing noted that certain non-debtor (i.e. not in bankruptcy) affiliates control the Brush 1&3 and Brush 4D gas-fired power plants in Colorado.
One of the bankrupt companies, Colorado Energy Management LLC, provides power plant optimization services to various power plants, including ones not controlled by the companies involved in the bankruptcy cases.
Due to various litigation related to its assets, and the battered credit market that came after the 2007 asset purchase from MDU, these companies have run into financial trouble, said the report to the court. Under the pre-arranged reorganization plan, the first- and second-lien lenders would acquire equity in the reorganized company or companies.