Oaktree-Backed Salem Power Plant Approved for Creditor Takeover

Salem Harbor Power Development LP, a power plant backed by Oaktree Capital Management, won bankruptcy court approval of a revised organization plan that hands its ownership to debt holders.

Judge Mary Walrath of the US Bankruptcy Court for the District of Delaware, who issued the preliminary approval at a Tuesday hearing, said she was “surprised” by the Salem, Mass.-based plant’s last-minute agreement with its builder, Iberdrola Energy Projects Inc., which created a consensual plan by resolving an objection over liability releases for Oaktree.

The plan’s restructuring will lower the company’s secured bond debt by about $230 million and create flexible ...