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A Bankrupt, Cash-Burning Unit Is Back to Haunt FirstEnergy (1)

April 5, 2019, 4:30 PM

The bankrupt, money-losing unit that FirstEnergy Corp. thought it had washed its hands of last year has come back to haunt the U.S. power giant.

Late April 4, a restructuring plan that the FirstEnergy Solutions Corp. unit had carefully crafted with bondholders -- one that would’ve severed ties with the parent company and handed the reins of the business over to creditors -- was struck down in court. In his ruling, U.S. Bankruptcy Judge Alan M. Koschik said the plan would have unfairly shielded FirstEnergy Corp. from future lawsuits.

The judge’s ruling is a blow to FirstEnergy, which has ...