Client Profile

Perryville Energy Partners, LLC, ("PEP" or the "Company"), a wholly owned indirect subsidiary of Cleco Midstream Resources, LLC , ("CMR"), is an independent power producer engaged in the business of producing and selling electric energy and energy related products into the wholesale power market. PEP owns and operates a state-of-the-art, 718 MW power generating facility located twelve miles north of Monroe, LA.

Situation

In August of 2000, CMR and a subsidiary of Mirant Corporation joined together to form PEP to develop and construct the facility. Mirant Americas Energy Marketing ("Mirant")agreed to take the entire output of the facility and signed a tolling agreement with PEP. In June 2002, CMR purchased Mirant’s ownership interest in PEP resulting in CMR owning 100% of PEP. The tolling agreement remained in place. In July 2003, Mirant and its affiliates filed for voluntary relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Northern District of Texas. As a result, the Mirant debtors rejected the tolling agreement and ceased making any payments. The rejection of the tolling agreement constituted a default under PEP’s outstanding term loan from its senior secured lenders. This action forced PEP to file for relief under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Western District of Louisiana, Alexandria Division in January 2004.

Solution

After filing bankruptcy, PEP and Entergy Louisiana, Inc. executed a Purchase and Sale Agreement whereby ELI agreed to purchase, and PEP agreed to sell, the facility for approximately $170 million subject to higher or otherwise better offers. SSG further validated the stalking horse bid as the highest and best value for the generation facility by facilitating a robust marketing effort.

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