A Salem Harbor, Mass., power plant backed by Oaktree Capital Management LP filed for bankruptcy protection to weather a $236 million arbitration award to its former contractor and pursue a dual-track restructuring to either sell itself or hand control to lenders, WSJ Pro Bankruptcy reported. Footprint Power Salem Harbor Development LP has proposed handing over 100% of its equity interests to lenders owed $290 million or selling itself out of chapter 11 if a suitable buyer emerges, court papers said. The Oaktree-backed company owns a 674-megawatt natural gas-fired plant located along Salem Harbor that has been embroiled in lawsuits and arbitration proceedings since 2018 with its engineering and construction contractor, Iberdrola Energy Projects Inc. Construction delays pushed back the project’s opening by 11 months and caused the plant to terminate its contract with IEP in 2018, according to papers filed late Wednesday in the U.S. Bankruptcy Court in Wilmington, Del., by chief restructuring officer John Castellano. A different contractor finished the construction. IEP filed an arbitration claim over the termination and last year was awarded more than $236 million, damages that were confirmed by a New York state court in January. Combined with the amounts owed to secured lenders, the IEP award put the plant at “significant risk of an inability to satisfy its debts,” Mr. Castellano said in court papers.
