NorthWestern Corp. (electric utility) files for bankruptcy

[Ediacara]

September 15, 2003
Last modified September 15, 2003 - 2:13 pm

NorthWestern Corp. files for bankruptcy
Associated Press

SIOUX FALLS, S.D. — NorthWestern Corp., parent company of NorthWestern Energy of Montana, said Monday it has filed for Chapter 11 bankruptcy.

The company, which just last week said it had failed to get enough shareholder votes to issue new shares of stock, said it filed for voluntary reorganization to reduce debt, improve capital structure and ensure the long-term financial health of the utility.

The paperwork was filed in U.S. Bankruptcy Court in Delaware Sunday, the company said. Northwestern also was notified on Monday that it would be removed from the New York Stock Exchange.


NorthWestern said its Blue Dot Services Inc. and Expanets Inc. subsidiaries were not included in the Chapter 11 filing.

The company had been trying to restructure without filing for bankruptcy. But it was unable to get enough shareholder votes to approve a plan to issue up to 200 million additional shares of stock.

Officials had hoped the plan would raise badly needed cash to help pay part of NorthWestern’s $2.2 billion debt.

More at the Billings Gazette

[rfranklin]

1. Another case of GAAP (GOP Awful Accounting Principles)...

Accounting, leaders hid debt, lawsuits allege
Kelly Hildebrandt
Argus Leader

published: 8/10/2003

Even as NorthWestern executives boasted of the company's growth and collected large bonuses, they knew the firm was floundering and tried to hide the rapid decline, some shareholders and analysts say.

Michael Goldberg, lawyer for Glancy and Binkow LLP, a firm representing shareholders in a lawsuit, summed it up during an interview earlier this year: "They knew of these problems when they were saying everything is great."

With $2.2 billion in debt, increasingly bleak credit reports and a stock price below $1 a share, the company stands on the verge of bankruptcy.

Stockholders have filed some 15 lawsuits and charge that NorthWestern knowingly misled them by not disclosing key financial information.

At the heart of the issue is a complex system of accounting methods that let NorthWestern post profits even as its nonutility subsidiaries suffered losses.

(more)

http://www.argusleader.com/specialsections/2003/northwestern/Sundayarticle2.shtml

[U2Shark]

2. Any chance

It could become a public utility? Owned by the state or city?

[Ediacara]

3. possibly...

I heard rumors that the city of Great Falls MT was trying to create a public utility co-op even before Northwestern went bankrupt. Montana Governor Martz stated on NPR this afternoon that she's confident that Northwestern will emerge from Chapter 11 a-ok, but knowing Martz.... I think I may stock up on sweaters this winter, as a bankrupt utility in a bad winter is a bad idea.

[havocmom]

4. Is Northwestern still flying the CEO home to Fl for weekends via private

jet as opposed to commercial carrier?