- Associated Press - Thursday, May 8, 2014

BILLINGS, Mont. (AP) - A federal bankruptcy judge will consider a key report to Southern Montana Electric Generation and Transmission Cooperative’s reorganization plans during a hearing Friday in Great Falls.

The hearing by U.S. Bankruptcy Judge Ralph Kirscher is one of two scheduled for this month that could resolve the wholesale electricity distributor’s financial problems after 2 ½ years in bankruptcy, the Billings Gazette reported in a story published Thursday.

The 210-page disclosure statement submitted in April details the Billings-based co-op’s business operations, bankruptcy filing and its reorganization plan. If Kirscher approves the statement, the plan will go to a May 20 confirmation hearing in Billings.

“The plan needs to get confirmed. Obviously that’s the big hurdle,” said Scott Sweeney, Southern’s interim manager.

Southern provides electricity to four cooperatives in Red Lodge, Lewistown, Hysham and Ashland. Arleen Boyd, a board member for Red Lodge’s Beartooth Electric Cooperative, said this week Beartooth is in talks with the three other co-ops to leave Southern.

No objections were filed to the disclosure statement by Monday’s deadline. However, a member of the Beartooth cooperative, Bruce Austin, filed a late objection Wednesday.

Austin, a Nye resident, said the report is “another baseless reorganization plan without regard to the value of the estate.”

He asked Kirscher to order a valuation of Southern.

The proposed settlement is the result of 2 ½ months of negotiations mediated by retired former U.S. Bankruptcy Judge Leif M. Clark of Texas.

Southern is proposing to repay its creditors a reduced debt of $21 million over four years while keeping customer electric rates at current levels.

The reorganization plan also calls for the sale of Southern’s Highwood Generating Station, a 46-megawatt gas-fired power plant it constructed a month before the October 2011 bankruptcy filing.

Southern borrowed $85 million to construct the first phase of the plant.

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Information from: The Billings Gazette, http://www.billingsgazette.com