Burgess BioPower, a renewable energy company operating a 75-megawatt biomass-fueled power plant in Berlin, New Hampshire, has filed a disclosure statement for its second amended reorganization plan that would convert approximately $145 million in debt to equity, with lenders taking control of the business. The plan, filed on March 19 in the U.S. Bankruptcy Court for the District of Delaware, proposes a debt-for-equity swap where DIP lenders would receive 99% of the reorganized company's equity and senior noteholders would receive the remaining 1%.
The disclosure statement, which explains the reorganization plan to creditors ahead of voting, reveals how the company reached this point after filing for Chapter 11 protection on February 9, 2024. The bankruptcy was primarily triggered by disputes with Eversource Energy over a Power Purchase Agreement (PPA) that contained provisions which would have effectively required Burgess to provide energy for no payment.
"Prior to the Petition Date, the Debtors and their advisors analyzed the PPA and Option Agreement, and determined that operating the Facility under the PPA would not be viable once Eversource began exercising its rights related to the CRF," the disclosure statement explains. "Quite simply, the Debtors would derive no income from future Energy sales to Eversource under the PPA for the following contract year."
Claim Classification and Recovery Projections
The plan categorizes claims against both Berlin Station, LLC and Burgess BioPower, LLC into separate classes with varying projected recoveries:
Berlin Station Claims:
- Class 1A (Other Secured Claims): $0 in claims with 100% projected recovery
- Class 2A (Other Priority Claims): $0 in claims with 100% projected recovery
- Class 3A (Senior Notes Claims): Approximately $115,350,000 plus accrued interest and fees, with less than 1% projected recovery
- Class 4A (Subordinated Note Claims): Approximately $29,700,000 with 0% projected recovery
- Class 5A (General Unsecured Claims): $71,657,778.75 with 0% projected recovery
- Class 6A (510(b) Claims): $0 in claims with 0% projected recovery
- Class 7A (Intercompany Claims): $0 in claims with 0% projected recovery
- Class 8A (Interests): No monetary value, with 0% projected recovery
Burgess BioPower Claims:
- Class 1B (Other Secured Claims): $0 in claims with 100% projected recovery
- Class 2B (Other Priority Claims): $0 in claims with 100% projected recovery
- Class 3B (Senior Notes Claims): Approximately $115,350,000 plus accrued interest and fees, with less than 1% projected recovery
- Class 4B (General Unsecured Claims): $3,877.92 with 0% projected recovery
- Class 5B (510(b) Claims): $0 in claims with 0% projected recovery
- Class 6B (Intercompany Claims): $893,033.03 with 0% projected recovery
- Class 7B (Interests): No monetary value, with 0% projected recovery
The plan provides for no recovery to general unsecured creditors, subordinated noteholders, or equity holders. Only the DIP lenders (through a separate administrative claim) and senior noteholders will receive new equity in the reorganized entities.
The biomass plant, operated through two related entities—Burgess BioPower, LLC and Berlin Station, LLC—is a significant economic contributor in New Hampshire, generating $70 million in annual economic activity and supporting over 240 direct and indirect jobs. As the largest buyer of biomass in New Hampshire, the facility purchases approximately 800,000 tons of low-grade wood annually from more than 115 suppliers across the state.
According to the disclosure statement, the company entered Chapter 11 with approximately $145 million in secured debt, including $115 million under a senior note facility and $29.7 million in subordinated debt. Since filing for bankruptcy, the debtors have secured court approval to reject their power purchase agreement with Eversource, allowing them to sell electricity through the open market while pursuing a reorganization plan.
The bankruptcy case has featured multiple settlements, including one with Eversource that resolved disputes over rejection of the power purchase agreement, and another with certain lenders that resulted in The Prudential Insurance Company of America, Pruco Life Insurance Company, Prudential Legacy Insurance Company of New Jersey, Pacific Life Insurance Company, and Pacific Life & Annuity Company (collectively, the "Selling Lenders") selling their positions to Keyframe Capital Partners, L.P.
Dean Vomero, Chief Restructuring Officer for the debtors, signed the disclosure statement, which outlines a timeline for plan confirmation. Key upcoming dates include:
- May 8, 2025: Deadline to file the Plan Supplement
- May 15, 2025: Voting deadline and plan objection deadline
- June 2, 2025: Confirmation hearing before Bankruptcy Judge Laurie Selber Silverstein
"The Debtors believe that the Plan is in the best interests of the Debtors' creditors and other stakeholders. All creditors entitled to vote on the Plan are urged to vote in favor of the Plan," the disclosure statement notes.
Unlike many recent bankruptcy cases that resulted in sales of assets, Burgess BioPower pursued a competitive sale process but ultimately determined that the debt-for-equity conversion offered the best path forward. Under the plan, general unsecured creditors are not expected to receive any distribution, though the reorganized debtors will not pursue avoidance actions against them.
The disclosure statement emphasizes that the facility "consistently ranks among the most efficient and well-run biomass plants in the country," with a capacity factor—a measurement of run time and efficiency—averaging over 90 percent, which "generally exceeds the industry average of around 58.1 percent."
The bankruptcy case is being administered as Case No. 24-10235 in the U.S. Bankruptcy Court for the District of Delaware.
This article was prepared using Stretto Conductor, our new AI-powered assistant that's here to help. Stretto Conductor was able to create this summary of a 91 page court filing in less than a minute. Always review the underlying docket filings for accurate information. The information and responses generated by Stretto Conductor may contain errors or inaccuracies and should not be relied upon as a substitute for professional or legal advice.
Link to full document: Disclosure Statement for the Second Amended Joint Plan of Reorganization of Burgess BioPower, LLC and Berlin Station, LLC