In re: FirstEnergy Solutions Corp., et al.
No. 18-50757 (Bktcy. N.D. Ohio)

FES Bankruptcy Settlement

IMPORTANT NOTICE

NOTICE TO CLASS MEMBERS RE CALCULATION AND DISTRIBUTION OF SETTLEMENT PAYMENTS, AND NOTICE OF ADDITIONAL ACTION NEEDED TO BE TAKEN BY CERTAIN CLASS MEMBERS ENTITLED TO A PAYMENT OF $600 OR MORE

PLEASE BE ADVISED THAT the Court-appointed Settlement Administrator (Heffler Claims Group) has calculated Settlement Payments for eligible Settlement Class Members (“Class Members”) based on the Recognized Claim Amount for each Class Member as set forth in the March 20, 2020 letter sent to each Class Member.  Pursuant to that letter and the Stipulation of Settlement, the stated Recognized Claim Amount for a given Class Member does not equal the amount of any payment that a Class Member may be entitled to under the Settlement; instead, “Recognized Claim Amounts” have been used to determine each Class Member’s pro rata percentage share of the Net Settlement Fund.  Each given Class Member’s Settlement Payment amount (subject to the Court-approved “Minimum Payment Threshold” further discussed below) has been determined by dividing its Recognized Claim Amount by the total of all Recognized Claim Amounts of all Settlement Class Members, and multiplying the result by the Net Settlement Fund available for Payments.  

Class Members That Are Not Entitled to a Payment.  To avoid the significant administrative expense involved in paying relatively small claims, and consistent with the Court-approved Plan of Allocation as well as the “minimum payment threshold” amount established for other creditors in the FirstEnergy Solutions bankruptcy proceedings, distributions will not be made to Class Members who would otherwise be entitled to receive a distribution of less than $50.00 (the “Minimum Payment Threshold”).  Here, Class Members whose Recognized Claim Amount equaled less than $247.50 failed to reach the Minimum Payment Threshold and will not receive a payment under the Court-approved Plan of Allocation in this matter.

Class Members Entitled to a Payment of At Least $50 but Less Than $600.   For Class Members who are entitled to a Settlement Payment in an amount greater than the $50.00 Minimum Payment Threshold but less than $600.00, the Settlement Administrator printed and mailed checks to such Class Members on December 31, 2020.  Class Members receiving such checks have until June 29, 2021 to cash or deposit the check or they will expire and become void.  

Class Members Entitled to More than $599.99 – Additional Actions Required.  For Class Members who are entitled to a Settlement Payment of greater than $599.99, the Settlement Administrator is (a) required to report the amount of your Payment to the IRS, and (b) is also required to obtain a completed Form W-9 from your company or firm to satisfy IRS tax reporting obligations before sending your company its payment check.  If your company is a Class Member that falls into this category, your company should receive a letter dated and mailed on December 31, 2020 (the “W-9 Request Letter”), that describes the relevant IRS requirements in greater detail and that encloses a Substitute Form W-9 that your company should complete and return as soon as possible.  You have until February 1, 2021 to complete and return the Substitute Form W-9 to avoid the consequences described in that letter. 



If you were previously advised in the Settlement Administrator’s March 20, 2020 letter that you had a Recognized Claim Amount of at least $247.50 (which in turn would allow your company to satisfy the $50.00 Minimum Payment Threshold and qualify to receive a check) -- and if your company has not received either (i) a payment check or (ii) a W-9 Request Letter by January 25, 2021 – please contact the Settlement Administrator through the 'Contact' section of this Website or call  1-833-930-2422.


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Settlement Class Members were mailed an Individual Notice letter on March 20, 2020, and are also being advised to view the more detailed “Website Notice” in the 'Documents' section of this website, because, based on information provided by FirstEnergy Solutions Corp. (“FES”,  now known as Energy Harbor LLC), their business is a member of a class of FES business customers that has been certified by the U.S. Bankruptcy Court for the Northern District of Ohio (the “Court”), and because a proposed settlement of the class’s claims is now pending before the Court. 

WHAT CLAIMS ARE AT ISSUE THAT INVOLVE MY BUSINESS?

The Class Representative in this matter, Schwebel Baking Company (“Schwebel”), alleges that FES breached FES’s contracts with its large and mid-size industrial and commercial customers (the “Settlement Class Members”) by “passing through” to those customers certain “Polar Vortex Surcharges” that FES had paid in connection with efforts to ensure a reliable supply of electricity during unusually cold weather conditions in early 2014.   FES (which filed for bankruptcy in 2018) has maintained throughout that it was entirely proper for it to “pass-through” the surcharges at issue, but it has agreed to a proposed class-wide Settlement to avoid the cost of further expensive litigation and to facilitate the implementation of its recently Court-approved Plan of Reorganization.

WHAT DOES THE SETTLEMENT PROVIDE?

Under the Settlement, in exchange for releasing all Polar Vortex Surcharge-related claims, the Settlement Class will receive an Allowed Claim of $12,000,000 in FES’s bankruptcy proceedings.  By contrast, Class Counsel estimate that had Schwebel and the Settlement Class prevailed on all aspects of their breach of contract claims, the Settlement Class would have been entitled to an Allowed Claim of roughly $22,000,000.  However, because the Settlement Fund will initially be funded with equity securities in the reorganized, post-bankruptcy FES which will then have to be sold and converted to cash (after which distribution checks will be sent to eligible Settlement Class Members), it is not possible to know with certainty what the ultimate cash value of the Settlement will be.  The estimated value of the Settlement Fund, based on information from FES’s last Disclosure Statement dated May 30, 2019 (which estimates how much value will be available to distribute to all of FES’s various creditors at the end of the bankruptcy proceedings) is $3.768 million, or 31.4 cents for each dollar of the Class’s $12 million Allowed Claim, before deductions for Settlement-related notice and administration costs and Class Counsel’s application for an award of professional fees and expenses.

WHAT ARE MY OPTIONS? 

To Participate in the Settlement and Be Eligible to Receive a Payment:
To reduce claims administration costs, you will not be required to file an individual claim, submit supporting documentation, or take any other actions for your Company to receive any payment it is entitled to under the Settlement.  Instead, under the proposed Plan of Allocation, each Settlement Class Member will receive a percentage share of the net Settlement fund based on their “Recognized Claim Amount,” which is equal to the total net amount of Polar Vortex Surcharges that it paid to FES.

Your Recognized Claim Amount will not be the same as the payment you will receive under the Settlement; instead, it will be used to determine your percentage pro rata share of the Net Settlement Fund.  Your payment will be determined by dividing (a) your Recognized Claim Amount by (b) the total of all Recognized Claim Amounts of all Settlement Class Members.  To avoid the significant administrative expense involved in paying relatively small claims, distributions will not be made to Settlement Class Members who would otherwise be entitled to receive a distribution of less than $50 (the “Minimum Payment Threshold”).

To Request a Review of your Recognized Claim Amount:
Based on billing records provided by FES, Heffler Claims Group (the “Claims Administrator”) has calculated your Recognized Claim Amount (i.e., the total amount of all Polar Vortex Surcharges that you paid) and reported it to you in your Individual Notice letter.  If you believe that your Recognized Claim Amount is not correct, and that it would be higher if calculated based on information from your records, you must submit a letter by May 11, 2020 (together with copies of supporting documentation) to the Claims Administrator that complies with the requirements of §8 of the Website Notice.

To Object to any Aspect of the Settlement, or to Request Exclusion from the Class:
If your business wishes to object to the proposed Settlement, Plan of Allocation or related Professional Services Fees and Expense Application, it may submit an objection to the Court, and it also has the right to enter an appearance through an attorney (at its own expense).  If your business does not want to be part of the proposed Settlement, the Court will exclude from the Class any member who timely and validly requests exclusion.  Any requests for exclusion must be received by April 21, 2020, and any objections must be received by May 1, 2020, and conform with the requirements set forth in the Website Notice.

THIS IS ONLY A SUMMARY AND SHOULD BE READ IN CONJUNCTION WITH THE WEBSITE NOTICE, WHICH IS AVAILABLE IN THE 'DOCUMENTS' SECTION OF THIS WEBSITE OR BY CALLING 1-833-930-2422.

The Website Notice contains important additional information concerning: (a) the nature of the underlying claims asserted on behalf of the Settlement Class; (b) the definition of the Settlement Class; (c) the defenses asserted by Debtor FES to the claims that were asserted against it; (d) the terms of the Settlement and the proposed Plan of Allocation; (e) estimated notice and administrative costs and Class Counsel’s application for an award of Professional Services Fees and Expenses; (f) each Settlement Class Member’s rights to appear by counsel, to request exclusion from the Settlement Class, to challenge the calculation of its Recognized Claim Amount, and to object to the Settlement, the Plan of Allocation or any Professional Services Fee and Expense Application; (g) the time and manner for exercising the foregoing rights; and (h) the binding effect of the proposed Settlement and proposed class-wide Judgment on Settlement Class Members.

PLEASE NOTE THAT IF YOU WISH TO BE ELIGIBLE TO PARTICIPATE IN THE SETTLEMENT (AND THE COURT APPROVES IT) YOU DO NOT NEED TO TAKE ANY ACTION (SUCH AS FILING A CLAIM FORM) TO RECEIVE WHATEVER PAYMENT YOUR BUSINESS IS ENTITLED TO UNDER THE PROPOSED SETTLEMENT AND PLAN OF ALLOCATION.

Please check this website for details and updates on the timing and format for the Fairness Hearing.  In light of the Coronavirus outbreak and related travel and other restrictions, it is possible that the Fairness Hearing may be held telephonically or by other means, and may also be rescheduled.

Please do not contact the Court with questions, as it will be unable to answer them.  Instead, please review the Website Notice in the 'Documents' section of this website.  You can also call the Claims Administrator, Heffler Claims Group, at 1-833-930-2422, or contact Co-Class Counsel, Scott+Scott Attorneys at Law LLP, at 1-212-223-6444.

This website is authorized by the Court, supervised by counsel and controlled by the Claims Administrator approved by the Court. This is the only authorized website for this case.

For more information please call 1-833-930-2422.

Documents

Please read for a full explanation of the settlement and your options and all applicable timelines.

Contact

Contact us with any inquiries, comments, and/or requests.

Important Dates

  • Individual Notice letters mailed to Settlement Class Members

    Friday, March 20, 2020
    Individual Notice letters were mailed to Settlement Class Members on Friday, March 20, 2020.
  • Exclusion Deadline

    Tuesday, April 21, 2020
    You must complete and mail your request for exclusion so that it is received by the Claims Administrator on or before Tuesday, April 21, 2020.  See §10 of the Website Notice for complete details.
  • Objection Deadline

    Friday, May 1, 2020
    You must mail your objection(s) and/or notice of intent to appear at the Fairness Hearing so that it/they are received or served no later than Friday, May 1, 2020.  See §14 of the Website Notice for complete details.
  • Request Review of Your "Recognized Claim Amount"

    Monday, May 11, 2020
    You must submit Your letter requesting review of Your Recognized Claim Amount to the Claims Administrator no later than Monday, May 11, 2020.  See §8 of the Website Notice for complete details.
  • Fairness Hearing Date

    Thursday, May 21, 2020
    The Fairness Hearing is scheduled for Thursday, May 21, 2020 at 10:00 a.m., ET.   See §16 of the Website Notice for complete details and check this website for updates.

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