Burgess BioPower operates with court approval

Sixteen months after Burgess BioPower filed for Chapter 11 bankruptcy, U.S. Bankruptcy Judge Laurie Selber Silverstein has approved a reorganization plan that allows the 75-watt biomass plant to exit bankruptcy.

The amended reorganization plan has the senior lenders swapping debt for equity, with the lenders holding claims worth approximately $145 million. General unsecured creditors will see no recovery of funds.

Berlin City Manager Phillip L. Warren Jr. said he believes the Delaware Bankruptcy Court’s approval of the plan is good news for the city. In an email conversation, he said the decision gives Berlin some assurance that Burgess BioPower plans on continuing operations. The plant is a major economic engine, with a study by the company estimating it contributes over $70 million a year to New Hampshire’s economy.

The biomass plant has continued to operate while in bankruptcy and has been selling its power on the open market. Earlier this year, the city signed a temporary payment-in-lieu-of-taxes agreement with the City of Berlin. The agreement covered tax years from April 2024 to April 2026 with Burgess BioPower agreeing to pay Berlin a total of $2.4 million.

The plan replaces CS Operations as manager of the facility with Olympus Power, a privately held U.S. independent power company based in Morristown, N.J., which owns and manages power plants.

The new general manager of the facility is a familiar face in the state’s forest industry. Mike O’Leary has more than 35 years of experience managing and operating biomass power plants including the Bridgewater biomass plant in New Hampshire. Court documents report he plans to retain the 28 existing staff personnel at the Berlin plant.

City Councilor and former Berlin Mayor Paul Grenier said he wanted to thank CS Operations for being very community oriented and working with the city. He specifically cited John Halle, Dammon Frecker and Sarah Boone of CS Operations and said he hopes for a similar relationship with the new manager.

“The bar has been set pretty high,” Grenier said.

In a disclosure statement filed with the Delaware Bankruptcy Court, Burgess BioPower Chief Restructuring Officer Dean Vomero said the reorganization plan was the result of extensive arm’s-length negotiations among debtors, senior lenders and other interested parties.

“The plan seeks to effectuate a comprehensive and feasible balance sheet reorganization, preserve the going concern value of the debtors’ estates, and emerge from chapter 11 on an expedited basis to the benefit of all stakeholders,” Vomero wrote.

Burgess BioPower/Berlin Station filed for Chapter 11 on Feb. 24, 2024. Berlin Station owns the biomass plant and 62-acre property and has a long-term lease with Burgess BioPower, which holds the regulatory licenses for the operation of the facility.

The company initially simultaneously pursued both a sales process and a reorganization plan by the senior lenders. Despite what the company called a “robust marketing process,” no qualifying bid was received, and the debtors did not proceed with the sales process.

In March of this year, Burgess BioPower filed an amended reorganization plan after debtors entered into a settlement agreement with lenders. Some lenders sold their senior secured notes and debtor-in-possession loans to Keyframe Capital Partners. Athene Life and Annuity company and Royal Neighbors of America did not sell their shares, and Athene amended its credit agreement to provide additional liquidity to the debtors to finance current operations and support reorganization with Keyframe to sponsor a plan to emerge from Chapter 11 as a working entity.

Burgess BioPower is the biggest biomass plant in the Northeast. It is the largest purchaser of low-grade wood in the state, buying about 800,000 tons annually from more than 115 suppliers. The facility supports in excess of 240 direct and indirect jobs.

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