ML20245J465
| ML20245J465 | |
| Person / Time | |
|---|---|
| Site: | Seabrook  |
| Issue date: | 04/24/1989 |
| From: | Dignan T PUBLIC SERVICE CO. OF NEW HAMPSHIRE, ROPES & GRAY |
| To: | |
| References | |
| CON-#289-8525 OL-1, NUDOCS 8905040135 | |
| Download: ML20245J465 (12) | |
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'89 TPa 27 P 3 :27 April 24, 1989 UNITED STATES OF AMERICA before the NUCLEAR REGULATORY COMMISSION
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In the Matter of
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PUBLIC SERVICE COMPANY
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Docket Nos. 50-443-OL-1 OF NEW HAMPSHIRE, at al.
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50-444-OL-1
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(Seabrook Station, Units 1
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(Onsite Emergency and 2)
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Planning and Safety
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Issues)
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APPLICANTS' ADVICE TO COMMISSION Attached hereto and marked "A"-is an " Amended Order Approving Seabrook Comprehensive Settlement" filed on April 18, 1989 in the Bankruptcy Court for the District of'New Hampshire in the proceeding with respect to Public Service Company of New Hampshire.
This order differs from that already filed with an advice to the commission principally by virtue of the fact that it includes the attached annex which l
i contains the comments adopted by the Court with respect to the order.
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b bR0 & CK 05000443 35 890424 G
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Of particular interest to the Commission may be pages 3-5 of the annex.
Respectfully submitted, f
Thomas G.~ Dign'an, Jr.
George H. Lewald Kathryn A. Selleck Jeffrey P. Trout Jay Bradford Smith Geoffrey C. Cook Ropes & Gray One International Place Boston, MA 02110-2624 (617) 951-7000 counsel for Applicants l
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m FILED UN'TED STATE 5 BA?O*F.CPTCY C0t%T A PE. I E ' '.
DISTRICT OF NTl! IIAMPS!! IRE US BANKPUMCY COUP.1 In re PUBLIC SERVICE COMPANY OF NEW HAMpS)!!kE, BK#86-00043 Debtor AMENDED ORDER APPROVING SEABROOK COMPREHENSIVE SETTLEMEN_T' Public service Company of New Hampshire filed its Motion For Order Approving Comprehensive Seabrook Settlement, with supporting Declarations and a Memorandum of 1.aw.
Certain objections were filed to the granting of the Notion and the approval of the settlement.
A hearing was hold on the Motion and on the objections on April 14, 1989, at which evidence and argument was presented. At the conclusion of the hearing, this Court-dictated into the record its findings of fact and conclusions of law (Subsequently the court has revised its findings and conclusions to a limited extent, for clarity and continuity, as indicated in the attached Annex.} 3ased on the record in this case and the findings and conclusions made as indicated, and good cause appearing, it is ORDERED:
1.
The Motion For Order Approving Comprehensive Seabrook Settlement is granted.
2.
Public Service Company of New flampshire is authorized and directed to take suelt serion as is required to consummate the transactions contemplated under the Memorandum of Understanding, the l
A reement, and the Twenty-Second Amendment to the Joint
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Settlement 6
I Ownership Agressent, which are described in the Motion and the u
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l supporting Memorandum and copies of which were introduced inte evidence at the hearing on the Motion, and to execute such other documents as are l
required to carry out those agreements.
3.
Public Service Company is authorized to waive the conditions to the Effective Dste of the Memorandum of Understanding or of the l'
Settlement Agreement to the extent that the conditions requito thc agreement by New Hampshire Electric Cooperative, Inc., Vermont Electric Generation and Transmission Cooperative, or Hudson Light and Power Department to release or covenant not to sue Public Service Company.
DATED: APRIL 18, 1989 w
ffDNORA5 K JAMES E. YACOS UNITED S*4 Debtor to Serve Full List D(Eksted M.N.gh.B
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i REVISED CotetENTS FROM HEARINC HELD APP.I' 14 1989 ON MOT 10_N FQh ORDEM AFFROVING C6HEEH_EtISI"**.
l SEAhkOOK SE, LEMEN! l Court Paper 1698]
(in rc Pubitc borvice Company of New Hampshire, BKf86-00043)
Basically I start with the proposition that the court in approving a settlement is not required to try the catter that may be litigeted..
There is a caveat to that I think in the reorganization court, to the extent that I think that reorganization courts have to de a little. bit more along the lines of evaluating the settlement vis a vis the ultimate plan that say come forward in the court, otherwise you could have the j
tail wagging the dog contrary to the intent of Congress in its structure of chapter 11.
In other words if the settienent were a massive portion of the financial prchis:s of the debtor in reorganization then in resolving those problems by settlement it wouldn't leave much for the reorganization pracess per, so to handle under the formulation and confirmation stanuards of chapter 11 of the Code I need to address that question because even though all parties in interest in this estate have now joined in supporting the settlement I think the court still has to independently make a determination whether the settlement is appropriate.
I think that is why the Supreme court casee keep using the isnguage " fair and equitable in approving settlements in reorganization proceedings --- because it is a fact that any settlement in any reorganization case in effect does avoid the requirements for confirmation of a plan or bands those requirements in a l
sense.
In such a case whatever plan that is going to be ultimately proposed and confirmed has to take into account the accomplished fact of the settlement, which e.ay or may not be something that could meet all the ANNEX l
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~293 N.10.14 1;:?2 D.0?
-PSNHMth FLR strict requirements of confirmation uf picn.
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In this case obviously the treatment of the prepetition c3 af as in..
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l aense might not pass muster under 1129, but when you have a c ompromisc i
and settlement in a chapter 11 I don't think it's any secret that the courts have authorized those settlements to eliminate obstacles to ultimate successful reorganization when it's appropriate. It's a matter of balance and it's a matter hf proportion.
In this case I find that the matters being settled do not dictate in an inappropriate manner the remaining issues for resciutior. in a reorganization plan.
I view this basically as evaluating whether the buy-back agreement cancellation in effect supports this settlement.
I realige that there are various allegations about prudence claims but I must say that on this record that is all they are --- rather amorphous arguments about prudence or lack of prudence with not too such detail as to what might be involved there.
There have been some reporta and studies on that, but they are all over the field as to what mismanagement or prudency claims might be asserted. There is also an exculpatory clause that as a matter of law might preclude any such claims.
It is also not at all clear in my judgment that the parties that might assert those claims would really undertake litigation of that magnitude for that type of clain. Against that last comment, however, is the fact that these are all public entities that might be pressured to take such a claim --- or assert such a claim if another one of them asserts it --- just because l
l the regulatory climato in which they operate might force them to assert such claims regardless.
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In any event I kind of down play the prudency claims as a ground for approving the settlement except in the sense that the very initiation of such litigation (whether it would ultimately be pursued to 2
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compietion) would I think create some obstacle to the ultimate JJcensing of Seabrook.
It wouJd have a disruptive effect where the joint owners t
are no longer marching in lockstep toward full commercial operation of Seabrook.
I think that would impact what happens in the NRC, So in that sense the prudency claim does have some relevance, but not in the sense that I can make a finding here that there is a one billion dollar exposure here. I don't know that it is. I do know that from what I've heard that the cost of litigating it, regardless of percentage of ownership, is probably going to be aroun $25 million.
The other majer point or benefit under the acttlement is to e
cancel the buy-back agreement under the agreement with MMWIC.
In that 1
regard, if Seabrook goea into operation there is an obvious value to this estate of getting rid of the buy-back agreement. That unavoidably raises the question of whether it is likely that Seabrook will go en
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line a question that I have danced around myself when given the chance to do so.
If it were unlikely that Seabrook is going to go en line then I would say why approve this settlement, or if it is to be approved, why approve it now until its more clear whether Seabrook is going to go on line because that $210 million dollar matter may go away if Seabrook doesn't go on line.
In my judgment based on what I've heard on this record, and in this case in ganeral, recognizing that I do not have any desire to examine the record before the NRC and its boards on all the environmental and I realize there are a lot of others that I'm not going to touch on in detail.
The briefs do that and I will adopt the debtor's analysis on the minor points in their briefing.
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safety issues, I think ; can aske e iinding based on this, record, for present purposes only, that it is itkely that Sesbrook v111 go irro commercial operation nr.d thus trigger the buy-back clause, and in that sense the benefit of cancelling the buy-back agreement is a substantial benefit to this estate supporting the settlement proposals.
With regard to the,i s sue s raised by the Mabey case, Official committee of Equity Security Holders v. Mabey, 832 F.2d 299 (4th Cir.
1987), on the question of paying propetition claims outside of a plan of reorganization. I think Mr. Levin did make the appropriate distinction in his argu=ent, i.e., what was proposed there was simply a sort of prepayment of part of those claims and not a valver of any rights by the
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claimanta, They ectually wanted to providt-W,edical services to the cinimants. Hoto we have a true comproesse and settlee.ent of claims and the fact that these third parties are getting cash from this estate does noz mean that they're being paid on a different basis than other creditors.
What is being done her' is a resolution of disputed matters that results in a certain payment to them. That happens in every compromise and settlement that happens along the way toward a reorganization plan in a chapter 11 case, and I think that by itself does not as a matter of law preclude approval of compromise and settisment outside of a plan of reorganization.
If it did there are many Chapter X cases under the old Act and many chapter 11 cases under the present code that should not have been confirmed, or the compromises and settlements that led to the reaching of a successful reorganization should not have been approved.
It's the very availability of a device for resolvin8 obstacles to f
reorganization by the compromise and settlement nothod that provides 4
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necessary flexibility in chapter 11 and often m.thes successful reorganizations poscitic.
't's the jed of the court however to draw n line betwnr en an approprinto use of the prc-plan compromise and settlement device, as opposed to in effect doing the whole plan in the pre plan mode, and 1 think that is what I'm paid to do and I think that is what I'm doing hers.
I shouldn't forget to add that all the parties in this estate agree with the settlement.
That is a factor in this court believe it or not.
I will find that the settlement is fair and equitable to the parties in interest in this estate and that it is within the range cf results of litigation reasonably expectable in the matters involved.
I further will find that damage to this estate from Scabroek delay clearly outweighs the relatively small cost of this settlement, or che perhaps increased benefits that might be obtained by renegotiating toward a better one.
I do believe that if this settlement is not approved it will present substantial obstacles to the ultimate licensing of the Seabrook plant, and f rom an economic basis I think the costs of this settlement as I say are clearly overbalanced by the benefits of completing the Seabrook licensing process as soon as possible.
I think those are the findings I need to make to support my decisinn.
If somebody thinks I haven't addressed a najor point speak now or forever i
hold your peace.
!! earing nothing I will simply have an order incorporating by reference my findings and cone.us.ons and adding that additional provision that Mr. Levin sientioned.
Submit it Monday.
5 mImm M N 68. 6T M 10d BTL
','Mr s..
'89 APR 27 P3 :27 CERTIFICATE OF SERVICE I, Thomas G.
Dignan, Jr., one of the attorneys.for the,
Applicants herein, hereby certify that on April'24,'.1989, I made service of the within document by mailing copies thereof, postage prepaid, to:
Lando W.
Zech, Jr., Chairman Mr. Thomas M. Roberts U.S. Nuclear Regulatory U.S. Nuclear Regulatory Commissjon Commission Washington, DC 20555 Washington, DC 20555 Mr. Kenneth M.
Carr Mr. James R. Curtiss U.S. Nuclear Regulatory U.S. Nuclear Regulatory Commission Commission Washington, DC 20555 Washington, DC 20555 I
Mr. Kenneth C.
Rogers
)
U.S. Nuclear Regulatory Commission Washington, DC 20555 Alan S. Rosenthal, Chairman Mr. Howard A. Wilber Atomic Safety and Licensing Atomic Safety and Licensing Appeal Panel Appeal Panel U.S. Nuclear Regulatory U.S. Nuclear Regulatory Commission Commission Washington, DC 20555 Washington, DC 20555 Mr. Thomas S.
Moore Mr. Richard R.
Donovan Atomic Safety and Licensing Federal Emergency Management Appeal Panel Agency U.S. Nuclear Regulatory Federal Regional Center Commission 130 228th Street, S.W.
Washingten, DC 20555 Bothell, WA 98021-9796 Administrative Judge Peter B.
Administrative Judge Ivan W.
Bloch, Chairman Smith, Chairman Atomic Safety and Licensing Atomic Safety and Licensing Board Board U.S. Nuclear Regulatory U.S. Nuclear Regulatory Commission Commission Washington, DC 20555 Washington, DC 20555 Judge Emmeth A. Luebke Administrative Judge Richard F.
Atomic Safety and Licensing Cole, Atomic Safety and Board Licensing Board 5500 Friendship Boulevard U.S. Nuclear Regulatory Apartment 1923N Commission Chevy Chase, MD 20815 Washington, DC 20555
L 1
y Dr. Jerry Harbour Administrative' Judge Kenneth A..
l Atomic Safety and Licensing McCollum Board 1107 West Knapp Street U.S.-Nuclear Regulatory Stillwater, OK '74075
. Commission Washington, DC 20555 Diane Curran, Esquire Robert'R. Pierce, Esquire Andrea C. Ferster, Esquire
. Atomic Safety and Licensing Harmon, Curran & Tousley Board Suite 430 U.S. Nuclear Regulatory-2001 S Street, N.W.
Commission
. Washington, DC 20009 Washington, DC 20555 Sherwin'E. Turk, Esquire Adjudicatory File Office of the Executive Legal-Atomic Safety and Licensing Board Panel-Docket (2 copies)
Director U.S. Nuclear Regulatory U.S. Nuclear Regulatory Commission Commission Washington, DC 20555 Washington,'DC.'20555 Atomic Safety and Licensing Robert A. Backus, Esquire Appeal Board Panel-Backus, Meyer & Solomon U.S. Nuclear-Regulatory 116 Lowell Street' Commission.
P.O.
Box 516 Washington, DC 20555 Manchester, NH 03105 Philip Ahrens, Esquire Mr.. J. P. Nadeau Assistant Attorney General Selectmen's Office Department of the Attorney 10 Central Road General Rye, NH. 03870 Augusta, ME 04333 Paul.McEachern, Esquire John Traficonte, Esquire Shaines & McEachern Assistant Attorney General 25 Maplewood Avenue Department of the Attorney P.O. Box 360 General-Portsmouth, NH 03801 One Ashburton Place, 19th Fir.
Boston, MA 02108 Mrs. Sandra Gavutis Mr. Calvin A. Canney Chairman, Board of Selectmen City Manger RFD 1 - Box 1154 City Hall Kensington, NH 03827 126 Daniel Street Portsmouth, NH 03801 Senator Gordon J. Humphrey R. Scott Hill-Whilton, Esquire U.S. Senate Lagoulis, Hill-Whilton &
Washington, DC 20510 Rotondi (Attn:
Tom Burack) 79 State Street Newburyport, MA 01950 >
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l Senator Gordon J. Humphrey Ashod N. Amirian, Esquire One Eagle Square, Suite 507 145 South Main Street I
Concord, NH 03301 P.O. Box 38 (Attn:
Herb Boynton)
Bradford, MA 01835 Mr. Thomas F. Powers, III Mr. William S.
Lord Town Manager Board of Selectmen Town of Exeter Town Hall - Friend Street 10 Front Street Amenbury, MA 01913 Exeter, NH 03833 H.. Joseph Flynn, Esquire Charles P. Graham, Esquire Office of General Counsel Murphy and Graham Federal Emergency Management 33 Low Street Agency Newburyport, MA 01950 500.C Street, S.W.
Washington, DC 20472 Gary W. Holmes, Esquire Richard A. Hampe, Esquire Holmes & Ells Hampe and McNicholas 47 Winnacunnet Road 35 Pleasant Street Hampton, NH 03842 Concord, NH 03301 Judith H. Mizner, Esquire William C.
Parler, Esquire 79 State Street, 2nd Floor General Counsel Newburyport, MA 01950 U.S. Nuclear Regulatory Commission Washington, DC 20555 Marjorie Nordlinger, Esquire Leonard Kopelman, Esquire U.S. Nuclear Regulatory Kopelman & Paige, P.C.
Commission 77 Franklin Street Washington, DC 20555 Boston, MA 02110 John P. Arnold, Esquire Attorney General George Dana Bisbee, Esquire Assistant Attorney General Office of the Attorney General 25 Capitol Street Concord, NH 03301-6397 MI Thomas G.
Dignan, Jr. /J b !
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