SIOUX FALLS, S.D., June 28, 2005 (PRNewswire-FirstCall) — NorthWestern Corporation d/b/a NorthWestern Energy reported that it has reached an agreement in principle with the creditors committee of Netexit, Inc., f/k/a Expanets, Inc., on a bankruptcy liquidation plan. Netexit, a subsidiary of NorthWestern, filed for Chapter 11 bankruptcy protection with the U.S. Bankruptcy Court for the District of Delaware on May 4, 2004.
According to terms of the agreement in principle:
* NorthWestern will receive an initial distribution of $20 million in cash for its allowed claims upon the effective date of confirming an amended and restated plan of reorganization and disclosure statement to be filed with the bankruptcy court.
* A reserve of an additional $5 million will be set aside through the amended plan for an additional distribution to NorthWestern after distributions are made on other allowed unsecured claims.
* A reserve of up to $22.9 million will be set aside through the amended plan for payment of allowed non-NorthWestern unsecured claims with distribution to occur only after all such unsecured claims are resolved. Any remaining cash from this reserve, which is not paid out to other allowed unsecured claims, will be paid to NorthWestern.
* $8 million will be paid on the effective date of the plan to securities class action claimants to satisfy a $20 million allowed liquidated claim provided to former NorthWestern shareholders in a previously announced court-approved settlement. Based on the terms of the securities settlement, NorthWestern expects to recognize an additional pre-tax loss on discontinued operations of approximately $8 million during the second quarter of 2005.
* After distributions are made to allowed unsecured, administrative and priority claims, any remaining Netexit estate funds will be paid to NorthWestern at the filing of a motion to close the bankruptcy proceeding.
According to Michael J. Hanson, NorthWestern President and Chief Executive Officer, the agreement in principle to settle the estate of Netexit was reached in bankruptcy court authorized mediation. “We are pleased to have been able to reach an agreement which will lead to a final liquidation of Netexit’s estate funds. We expect the final resolution of Netexit’s claims will lead to significant cash distribution to NorthWestern within the next six to nine months.”
An amended and restated plan of reorganization and disclosure statement will be finalized and filed with the U.S. Bankruptcy Court for the District of Delaware in the next several weeks incorporating the terms of the settlement reached during the mediation. According to the agreement in principle, Netexit’s creditors committee will support the amended and restated plan of reorganization and disclosure statement in a solicitation letter urging approval of the plan by Netexit’s creditors.
If approved by creditors and confirmed by the bankruptcy court, cash distributions could be made to all unsecured creditors as addressed in the settlement agreement and consistent with the bankruptcy code soon after the effective date of such plan which date is expected to be sometime in the fourth quarter of 2005.
About NorthWestern Energy [ www.northwesternenergy.com ]
NorthWestern Energy is one of the largest providers of electricity and natural gas in the Upper Midwest and Northwest, serving more than 617,000 customers in Montana, South Dakota and Nebraska.