FirstEnergy Corp.announced it has reached an agreement in principle with two groups of key creditors in the Chapter 11 proceedings of FirstEnergy Solutions (FES), its related entities and FirstEnergy Nuclear Operating Company (FENOC) on a proposed settlement of all potential claims among FE, FES and the creditor groups. Collectively, the creditors in this agreement represent a majority of the outstanding unsecured and secured debt obligations of FES and its related entities, including the majority of Bruce Mansfield certificate holders.

On March 31, 2018, FES, its subsidiaries and FENOC made voluntary Chapter 11 filings under the United States Bankruptcy Code.  FirstEnergy and its distribution, transmission, regulated generation and Allegheny Energy Supply (AE Supply) subsidiaries were not part of the filing.

This agreement in principle is a significant step toward FES, its related entities, and FENOC ultimately emerging from bankruptcy.  The settlement is intended to fully release FirstEnergy and related parties from all claims.  It provides FES, its subsidiaries, and FENOC with assistance from FirstEnergy on key business matters during the restructuring process.  The agreement also affirms FirstEnergy's previously announced guarantees and assurances of certain FES employee-related obligations, which include unfunded pension obligations and other employee benefits, and provides for the waiver of certain inter-company claims held by FirstEnergy.

The agreement is subject to approval by the FirstEnergy and AE Supply boards of directors, the execution of definitive agreements and certain other conditions, and – as to participation by FES, its subsidiaries and FENOC – approval by their respective boards.  It also is subject to the approval of the Bankruptcy Court.

The creditor groups also agreed to use their best efforts to have the Official Committee of the Unsecured Creditors, as well as any remaining key creditors, join the settlement by June 15, 2018.  The complete terms of the agreement are described  in a regulatory filing submitted with the SEC on April 23.