NRG Energy Inc.’s plan for a friendly divorce from GenOn Energy Inc. faces a court test this week as owners of power plants in Maryland ask a judge to award them as much as $620 million in damages, the Wall Street Journal reported today. A win by the power plant owners would be a loss for GenOn’s bondholders and a probable upset of the chapter 11 plan. Bondholders back a restructuring plan that separates GenOn from NRG, swapping out $1.8 billion in debt for equity in a stand-alone power-generation company. NRG acquired GenOn in 2012 for $1.7 billion. With confirmation hearings slated to start Nov. 13, the question of how much the plant owners could be owed is a major factor. Judge David Jones in Houston is being asked to set the value of the plant owners’ claims; the higher the estimated figure, the more leverage they have in deciding GenOn’s fate. Hurt by low energy prices, NRG has embarked on a program of unloading assets and cutting costs, and GenOn’s June bankruptcy filing is part of the transformation process.
