Kramer Levin achieved confirmation of a chapter 11 plan in the $700 million bankruptcy case of AES Eastern Energy, L.P. et al. (“AEE”), which filed for chapter 11 protection on December 30, 2011.
AEE, a subsidiary of The AES Corporation, owned six coal-fired electric generating plants located in New York State. With the Committee’s active involvement, AEE successfully implemented the sale of its two operating power plants (Cayuga and Somerset) and the sale of its four inactive plants pursuant to a sale processes under section 363 of the Bankruptcy Code. In addition, Kramer Levin lead an investigation against AEE’s parent corporation in connection with certain dividends paid to them prior to the bankruptcy filing and successfully entered into a settlement agreement which provided an additional $47 million of cash consideration and a waiver of over $60 million in claims against the bankruptcy estates. As a result of these efforts, general unsecured creditors received an initial distribution of approximately 11% of their claims within a year of the bankruptcy filing. The plan also provided for the creation of a liquidating trust, that will be administered by Eugene I. Davis of PIRINATE Consulting, which will investigate potential avoidance actions on behalf of general unsecured creditors. Kramer Levin represents the liquidating trust during the post-effective date period.
Kramer Levin’s team on the matter included Corporate Restructuring and Bankruptcy partner Robert T. Schmidt; Litigation partner Gregory Aaron Horowitz; Corporate partner Abbe L. Dienstag; Tax partner Barry Herzog; Corporate Restructuring and Bankruptcy special counsel Gregory G. Plotko; Tax special counsel Helayne O. Stoopack; and Corporate Restructuring and Bankruptcy associates Elan Daniels, Jordan D. Kaye, Yekatrina Chernyak and Benjamin C. Wolf.
