Short-Term Future Of Pleasants Power Secured While Bankruptcy Case Continues Forward
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CHARLESTON - Disagreements remain between the two factions wrestling for control of the former Pleasants Power Plant, but the operations at the coal-fired power plant remain secure with a possible sale down the road that could make West Virginia whole of its $50 million loan.
Documents filed last week in the U.S. Bankruptcy Court for the District of Delaware detail an agreement between Omnis Pleasants LLC, tied to motivational speaker and investor Tony Robbins, and Quantum Pleasants LLC, tied to the previous management group founded by Simon Hodson, agreeing to add another to the board currently managing the plant.
Alan Carr, the CEO of New York-based Drivetrain LLC, will join Gilbert Nathan as director. Carr will serve on the board overseeing the former Pleasants Power Plant with full directorship rights and duties until the Chapter 11 case for the plant is formally closed or dismissed.
Omnis Pleasants filed for Chapter 11 bankruptcy July 26 in the U.S. Bankruptcy Court for the District of Delaware. The company cited a need to restructure its operations, resolve pending litigation and governance disputes, and prepare the plant for a possible sale.
That bankruptcy is being challenged by Quantum Pleasants and Omnis Fuel Technologies, founded by Hodson in 2023 to operate the plant and supervise the retrofitting of Pleasants Power to be powered by hydrogen produced through Hodson's "quantum reformer" technology, burning coal at high temperatures to extract hydrogen for the power plant and graphite to be sold to various manufacturers.
In February, Hodson and Quantum Pleasants management were replaced by David Hindman as CEO and Nathan as director and independent manager. Hodson and Omnis Fuel Technologies filed a lawsuit in Pleasants County Circuit Court in July against Nathan and TRAG/RG Energy, companies also tied to Robbins, after Hodson attempted to pay off remaining debts in order regain control of the plant again.
Charles Gassenheimer, president of Omnis Fuel Technologies, said in a statement last week that Kirkland and Ellis, an international law firm, helped broker the agreement between Omnis Fuel Technologies, Omnis Pleasants, and TRAG/RG Energy.
“We are grateful for Kirkland’s successful efforts to bring the parties together,” Gassenheimer said. “This gives us reason for hope, while important questions remain. We want a fair process that protects the interests of all stakeholders and promotes Pleasants’ contribution to West Virginia’s economic future.”
Broader legal disputes, including a pending motion to dismiss the bankruptcy case made by Quantum Pleasants or appoint an independent trustee, remain unresolved and are slated for a trial in December.
In a separate order, the bankruptcy court authorized Omnis Pleasants' continued post-petition use of pre-petition collateral, specifically cash collateral generated from energy and capacity sales, as the bankruptcy continues. In exchange, the court grants adequate protection, replacement liens, and super-priority administrative claims to the TRAG/RG Energy, the pre-petition secured lenders to Omnis Pleasants, to offset any potential loss in asset value.
Omnis Pleasants has more than $80 million in debt, secured by a first-priority lien on substantially all assets, including the Pleasants Power Station, to TRAG/RG Energy. The most recent forbearance agreement was Feb. 6. The largest entities that are owed money include a $50 million loan owed to the West Virginia Economic Development Authority (EDA) and $20 million to Bilt Technology LLC, (also known as Kuro Infrastructure Delaware, Inc.) which designs and builds modular data centers.
The court-supervised sale of the 1,278-megawatt Pleasants Power Station is being managed by investment banking firm Houlihan Lokey. According to Quantum Pleasants, 92 prospective buyers have been contacted with 39 prospective buyers signing non-disclosure agreements. Out of the 92 potential buyers, Houlihan Lokey identified 23 buyers as possible acceptable bidders, though due diligence continues.
The second order puts in place deadlines for challenges beginning Sept. 30, including a special extended challenge deadline for five business days past a post-bid deadline giving entities involved in the bankruptcy, including the EDA, the opportunity to challenge any claims made during the bankruptcy process by TRAG/RG Energy.
The final bid deadline is Nov. 9 with a final bankruptcy court sale hearing scheduled for Nov. 18. If the Pleasants Power sale isn't sold, then a trial on pending motions to dismiss the bankruptcy or appoint a trustee would begin Dec. 8 and continue through Dec. 11.
Hindman, in a phone interview last month, said that a key priority in the sale of Pleasants Power is keeping the plant operating as a merchant coal-fired power plant provide dispatched energy to the 13-date PJM Interconnection market, the plant's approximately 140 workers employed, and making West Virginia whole for its $50 million loan.
"We see the path here as a sale of the plant," Hindman said. "It’s important to us that the buyer be a party that has the knowledge and the financial wherewithal to successfully run a power plant, which in the foreseeable future is a coal-fired power plant, and that they be committed to successful, safe, reliable operation of that plant."
"We believe that the proceeds of that sale should be sufficient to repay the secured debts and the loan that was guaranteed by the state, the WVEDA loan," Hindman continued. "We take those obligations very seriously and are confident that we’re going to find a path that will result in full recovery for those parties."