ML20117B455
| ML20117B455 | |
| Person / Time | |
|---|---|
| Site: | Seabrook  |
| Issue date: | 11/19/1992 |
| From: | Ritsher J ROPES & GRAY |
| To: | Murley T Office of Nuclear Reactor Regulation |
| References | |
| NUDOCS 9302040147 | |
| Download: ML20117B455 (5) | |
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HAND DELIVER Dr.-Thomas E. Murley Director office of Nuclear Reentor Regulation
- 1 U.S. Nuolear Regulatery commission washington, D.C.
20555 Ret Docket No. 50-44 3, Seabrook Station, 71 nit ' ll -Bankruptcy.
Court Proceeding with Respect to EUA Power Corporation, J
Debtar and Debtor-in-Danaammien Dear Dr. Nurley As counsel for the several Joint Owners of seabrook station on laatters before the Nuclear Regulatory commission, we have been-directed by North Atlantic EnerTY service Corporation,-the licensed operator of seabrook station, to file this request on behalf of EUA Power corporationi("EUA PuwerM), one of the and of the-official Bondholders' committee (referred licensess,in the above bankruptcy proceeding in order to expedits 4
to below) the final resolution of that banXruptcy proceeding.
As indicated below, the request herein only.affects EUA Poweri it will:have no 1
impact on the operations of Seabrook station-and will result in no changee in tse representation on any oversight committees---
under the seabrook Joint ownership Agreement.
Background
..EUA Power is an electric public utility subsidiary of Eastern Utilities Associates, a registered holding company under-the Public Utility Molding company Act of 1935, as amended interestinseabrookstation.[palassetisanundivided
("PUHcA").
EUA Power's princ 12.13240t l
' EUA ' Power's acquisition of. that interest;was approved by the NRC on September 12,-1984 by issuance of Amendment-No. 9 to Construction Permit No. cPPR-135 in the above docket.
9302040147A2i119 L (g PDR ADOCK 05000443 j
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nopra & Gm Av Dr. Thomas E. Hurley November 19, 1992 On February 26, 1991 EUA Power filed a voluntary petition under Chapter 11 of Title 11 of the United states Code (the
" Bankruptcy Code") and has operated its business as debtor-in-possession under the jurisdiction and control of the Bankruptcy Court since that date.
The Official Bondholders' Committee of EUA Power (the "Committes ) was appointed, by order of the United a
states Trustee dated March 14, 1991, as the duly authorized representative of the persons holding CUA Power's outstanding secured Notes.
Since that date, the Consittee has been actively engaged in pursuing a favorable resolution of those proceedings.
When EUA pover's exclusivity period expired, the Committee became eligible to file its own proposed plan of reorganisation and, on July 20, 1993, the Committee did in fact file auch a plan (as subsequently amended, the a plan").
The Plan provides in substance that once all applicable re p1 story approvals have been obtained, including final NRC approva2, the existing equity securities of EUA Power would be extin@ished and replaced by a single class of common stock which would be exchanged by the reorganized debtor for the debt of EUA Pever held by its various classes of creditors.
The Plan also contemplates the syndication of a secured plan of Reorganisation financing facility as further support for the continuing operations of the reorganized debtor.
The plan expressly acknowledges that the requisite regulatory approvals presently include, among others, action by the Nuclear Regulatory Commission under the Atomic Energy Act, as amended (the "Act"), and the Securities and Exchange commission under the FUNCA.
The NRC approval is required because the Plan's contemplated exchange of new equity securities for debt securities would involve an indirect transfer of control of EUA Power's interest in the Seabrook Operating License.
The SEC approval is required because Section 11(f) of the PUHCA requires that
"(ijn any proceeding in a court of the United states...in which a receiver or trustee is appointed for any registered holding company, or any subsidiary company thereof....a reorganization plan for a registered holding company or any substdiary company thereof shall not become effective unless such plan shall have been approved the Conniesion after opportunity for hearing prior to its submission to the court."
It has been, and continues to be, the intent or the Committee and NAESCO to file with the NRC for the requisite consent to that aspect of the Plan as soon as the other regulatory hurdles have been overcone.
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Ropts & GnAv Dr. Thomas E. Murley November 19, 1992 Currant Statum of Procandinos Since Section 11(f) of the FUNCA may make SEC approval a prerequisite for any other approvals of the Plan, the committee filed a roguest for such approval With the SEC on July 16, 1992.
Discussions have been pursued with that agency since the date of that filing and it has now become apparent that because of other workloadconsiderations,thethorougnreviewwh[chwould necessarily prwoede any 8EC action on the.pending request will take considerably more time and will inevitably further defer the initiation of proceedings before the NRc and the Bankruptcy Court
- a delay which would prolong the uncertainty and adverse effects which the Plan is designed to resolve.
As an alternative, since the SEC's jurisdiction is founded solely upon the status of EUA Pover as a subsidiary of a registered holding company, a status which will be eliminated when the Plan is ultimate?.y implemented, the SEC Staff has indicatea that it would favorably consider an interim stop designed to eliminate the SEC's jurisdictica at the beginning oL the process rather than at the end namelyt an immediate redemption of 100% of EUA power's o,utstanding common stock which would terminate EUA Power's subsidiary status and the jurisdiction of the SEC in this matter, thus eliminating the regulato n logjam which presently exists and permitting the prompt initiation of the Plan confirmation proceedings before the Bankruptcy Court and the fornal approval proceedings before the KRC.
The SBC Staff has further indicated that it could act expeditiously upon a request for approval of such a stock redemption after a minimam public notice period of 15 days.
The partips to the Bankruptcy proceeding believe that the Bankruptcy court would look favorably upon this interim step as a means of removing the statutory delay created by section 11(c) of the PUNCA knd of expediting ultimate resolution of the proceeding.
Therefore, this inttrix step could realistically be consummated before year end, if the NRC is also able tc accommodate this schedule.
s A hearing has already been scheduled on December 8, 1992 by the Bankruptcy Court at which time it will consider whether the Disclosure Statement describing the Plan should be approved. This consideration will necessarily involve review of the stock redemption proposal and the desirability of eliminating the SEC role in these proceedings to expedite a final resolution.
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Dr. Thomas E. Nurley
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November 19, 1833 1
i Pramant naquant As noted above, the ultimate implementation of.the Plan which contemplates the substitution of new persons as the equ,ity owners of the.reorganised EUA Power, will involve an indirect transfer of control of the sembrook Operating License.
This-
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requires the prior approval of the Nac.- 10 Crm 350.80.
NAEsco and the Committee acknowledge that fast and intend to seek such i
approval as soon as the other preconditiene to moving forward are met.
Indeed, implementation of the interin step described above would clear the way for an earlier formal filing with the NRC with respect to the Plan and a thorough analysis by the NRC of the Plan and cf the resulting new owners of EUA power.
81milarly, the interia step of redeeming the EUA Power comuon stock will itself involve a change in the ownership of.that eteck
- and therefore, arguably, a transfer of contro3 under 10 CFR Iso.80.
However, in actuality, the proposed redemption by EUA-Power of its common stock is merely an interim feel 11tating step i
toward the ultimate approval of the Plan whish, by itself, does not put new owners in place.
Rather, this-interia step, taken for the sole purpose of eliminating the basis of jurisdiction of the ssC under the PUNCA, will leave the debtor-in-possession, EUA Power, under the jurisdiction and control ef the Sankruptcy Court,,and will in no way alter the existing business of EUA' Power.
Furthermore, this interim step will=have no effect on t
the operation of Seabrook station itself because NAEsco.is the only licensee under the seabrook op rating License which is authorised to. operate the facility and EUA Power has no direct-involvement in the operation of the facility.
-The importance of this interim step is that it will facilitate the prompt resolution of the EUA Power bankruptcy.
proceeding.
By eliminating the need.for prior SEC approval under section 11(f) of the PUNCA, it cleare the way for Sankruptcy Court approval of the Dieciosure statement-which can then be used by the committee to solicit favorable votes from the EUA Power creditore and to finalise negotiations for the post-bankruptcy-secured financing facility.
With those prerequisites in hand, final approvals from the NRC and the Bankruptcy Court can be fornally applied for.
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! Since EUA Power's business operations are-not affected by this interim step, there are no new antitrust issues to be-considered at this time.
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See-Amendment No.-10 to the-Tacility Operating License Noi NPF-86, dated May 29, 1992,-in the-above docket.-
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i Morts& GmAv Dr. Thomas.E. Xdriey
~3-NOVeaber 19, 1992 Therefore, with spoolfio noknowledgement that the NRC has jurisdiction to apprcve the transfer of control inherent in the Plan prior to its implementation, on behalf of NAssco and the ccanittee request is hereby made that the NRC grant its appreval of the proposed redemption of EUA Power's common stock with express recognitlen that the redemption is only an interim step toward laplementation of t.he Plan and that the NRC has jurisdiction over the subsequent transfer of control contemplated by the Plan.
It is also respectfully requested that the NRC act upon this request by December 8, 1992 in coordination with the Bankruptcy court's schedule, so that the stock redemption can be completed before year and, thus assuring the tar benefits for the debtor's estate.
This will also clear the way for the filing, early in the new year, of a formal application to the NE; for approval of the elements of the Plan subject to its jurisdiction, at which time a thorough examination of all the issues can be undertaken before the ultimate transfer of control of EUA Power and its interest in the seabrook operating License is penitted to occur.
NAtaco, the committee, the Committee's counsel and the undersigned are available to discuss any aspects of this request at your convenianoe.
We do respectfully ask for your prompt attention to this satter so that the time schedule can be met.
Very truly yours, R0 PES & GRAY sy i
John A. Riteher JAR /jmfIunusas,n I
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