Opinion ID: 194766
Heading Depth: 2
Heading Rank: 2

Heading: The Merger Proposal.

Text: On January 28, 1988, PSNH filed a voluntary petition in the United States Bankruptcy Court for the District of New Hampshire for reorganization under Chapter 11 of the Bankruptcy Code. 11 U.S.C. 1101 et seq. (1988). PSNH alleged that it was unable to recover in its rates the outlays it had made in the construction and operation of the Seabrook nuclear power plant. On April 20, 1990, after 3 NU's operating companies are Connecticut Light and Power Company (CL&P), Western Massachusetts Electric Company, Holyoke Water Power Company (HWP) and HWP's wholly-owned subsidiary, Holyoke Power and Electric Company (HP&E). These companies are wholly-owned subsidiaries of NU and are public utilities supplying retail and wholesale electric service in Connecticut and Massachusetts. -8- sifting through several competing reorganization plans, the bankruptcy court approved NU's proposal to merge with PSNH and to acquire and operate all of PSNH's power facilities. See In re Public Service Co. of New Hampshire, 963 F.2d 469, 470 (1st Cir.), cert. denied, Rochman v. Northeast Utilities Service Co., 113 S. Ct. 304 (1992). NU's proposal contained a two-step process: first, PSNH would emerge from bankruptcy as a stand-alone company bound to a merger agreement with NU; second, PSNH would be merged with an NU subsidiary created solely for the acquisition (NU Acquisition Corporation), with PSNH emerging as the surviving entity. After the merger, PSNH would be a wholly-owned subsidiary of NU and would transfer its ownership interest in Seabrook to a newly formed NU subsidiary, North Atlantic Energy Corporation (North Atlantic). The second step would occur only after all necessary approvals were received from the relevant regulatory agencies.