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.
