Reuters reports Edison Mission Energy, the unregulated power generation business of Edison International, has filed for Chapter 11 bankruptcy protection after being hurt by heavy debts, weak power prices and high fuel costs.

Under a restructuring plan which needs court approval, Edison International will transfer its 100% equity interest in Edison Mission to unsecured creditors including noteholders, who together hold about $3.7 billion of the company's outstanding public debt.

In the article, Reuters says a large portion of the debt is held by a group of hedge funds including York Capital Management, which invests in distressed debt.

The restructuring aims to substantially reduce the company's existing public debt. Edison Mission's operations are expected to continue as normal in the meantime.

In a statement, Pedro Pizarro, president of Edison Mission said it plans to emerge from the restructuring as a recapitalized company separate from its parent. The separation from Edison International is anticipated to occur by December 2014.

Edison Mission, based in Santa Ana, CA, owns and operates coal, natural gas and renewable power plants producing more than 10,000 megawatts in states including California, Illinois, Pennsylvania and West Virginia.

Read the entire Reuters article.