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A Bankrupt, Cash-Burning Unit Is Back to Haunt FirstEnergy

  • FirstEnergy Solutions proposed legal shield for parent company
  • Parent can’t shed future claims in unit’s bankruptcy: judge
The FirstEnergy Corp. W.H. Sammis Plant coal-fired power plant stands along the Ohio River in Stratton, Ohio.
Photographer: Justin Merriman/Bloomberg
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The bankrupt, money-losing unit that FirstEnergy Corp. thought it had washed its hands of last year has come back to haunt the U.S. power giant.

Late Thursday, a restructuring plan that the FirstEnergy Solutions Corp. unit had carefully crafted with bondholders -- one that would’ve severed ties with the parent company and handed the reins of the business over to creditors -- was struck down in court. In his ruling, U.S. Bankruptcy Judge Alan M. Koschik said the plan would have unfairly shielded FirstEnergy Corp. from future lawsuits.