Northwestern Case Study
Re-Energizing a Company to Ensure a Bright Future
Background
NorthWestern Corporation, dba NorthWestern Energy, one of the largest providers of electricity and natural gas in the northwestern United States, began operations over 80 years ago. Headquartered in Sioux Falls, SD, the utility served 630,000 customers in Montana, Nebraska and South Dakota and employed 1,350 people.
Due to heightened competition in NorthWestern’s service territories, disrupted power generation outages, increased maintenance and repairs, and higher fuel supply costs, NorthWestern Corporation filed for Chapter 11 protection on September 15, 2003 in the District of Delaware.
Results
KCC worked closely with Northwestern’s team of professionals, Paul, Hastings, Janofsky & Walker, LLP, Greenberg Traurig and Alvarez & Marsal, in preparing the Schedules of Assets and Liabilities and Statement of Financial Affairs, reconciling claims, and fulfilling a complex solicitation process approved by the Court. The case involved over 13,000 creditors and KCC played an instrumental role in data collection and review. In addition, KCC assisted the professionals with extensive claim objections, providing detailed claim data to help resolve claims quickly.
The Debtor’s complex solicitation procedures involved gaining acceptance/rejection of the plan of reorganization from holders of more than 25 bond issuances. A dispute with preferred stock holders required NorthWestern to re-solicit and, with the assistance of KCC and Bondholder Communications Group, Northwestern confirmed its plan of reorganization.
NorthWestern Corporation emerged from Chapter 11 on November 1, 2004. The Plan eliminated $1.35 billion in company debt, reduced excess overhead costs and allowed for the disposition of significant non-utility assets. Today, NorthWestern continues to be a reliable and dependable energy service provider. In January 2007, Edison Electric Institute awarded NorthWestern with the Emergency Recovery Award for outstanding efforts in restoring disrupted electric service.
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