HELENA - NorthWestern Corp. on Wednesday got two more months to file its financial reorganization plan, but a federal bankruptcy judge in Delaware didn't rule yet on whether the company can pay $8.6 million in bonuses to top executives and employees.
No one opposed the time extension sought by the company at the hearing before U.S. Bankruptcy Judge Charles G. Case II. Attorneys have said these extensions are common in bankruptcy filings. The reorganization plan now is due March 12.
The timing for proposed bonuses was left up in the air Wednesday.
"It's not totally resolved yet," said Al Brogan, a Montana Public Service Commission lawyer who attended the Delaware hearing. "We thought there was an agreement last night, but apparently there was a misunderstanding."
Montana consumer counsel Bob Nelson, who monitored the meeting from Helena, said a bonus schedule agreement had been worked out but fell apart Wednesday. NorthWestern's bankruptcy attorney described the schedule changes at the hearing, but the PSC's outside lawyer, Brady Williamson of Madison, Wis., disagreed with part of it.
The PSC is expected to take up the revised bonus schedule next week.
"Nothing is going to happen until it's back before us," said Commissioner Tom Schneider, D-Helena.
In what PSC Chairman Bob Rowe, D-Missoula, called "the most important thing" that happened at the hearing, NorthWestern agreed to recognize the commission's authority to decide if any bonuses awarded to company executives and officers would be paid for by consumers as part of their monthly utility bills. If not, any bonus costs would have to be absorbed by company shareholders.
Rowe said the PSC has full authority to review these bonus costs as it determines whether to allow them to be recovered in utility bills. The consumer counsel backed the PSC on this issue.
This dispute over PSC authority over bonuses arose in January 2003 when the commission authorized NorthWestern to borrow more money, but attached several conditions. One condition was that the PSC had to approve any new pay plan by the company, which NorthWestern has disputed.
NorthWestern spokesman Roger Schrum said company officials are pleased the court approved the request for a 60-day extension.
"We've made substantial progress with the reorganization, and it provides us with enough additional time to complete the plan and get it filed," Schrum said.
Faced with $2.2 billion in debts, NorthWestern filed for bankruptcy protection on Sept. 14.
NorthWestern, based in Sioux Falls, S.D., is the parent corporation of NorthWestern Energy, which provides natural gas service to 160,000 Montana consumers and electricity to nearly 300,000 customers in the state. NorthWestern bought Montana Power Co.'s utility transmission and distribution business.