[Federal Register: November 16, 2004 (Volume 69, Number 220)]
[Notices]
[Page 67200-67201]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr16no04-113]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-27909]
Filings Under the Public Utility Holding Company Act of 1935, as
Amended (``Act'')
November 9, 2004.
Notice is hereby given that the following filing(s) has/have been
made with the Commission pursuant to provisions of the Act and rules
promulgated under the Act. All interested persons are referred to the
application(s) and/or declaration(s) for complete statements of the
proposed transaction(s) summarized below. The application(s) and/or
declaration(s) and any amendment(s) is/are available for public
inspection through the Commission's Branch of Public Reference.
Interested persons wishing to comment or request a hearing on the
application(s) and/or declaration(s) should submit their views in
writing by December 6, 2004, to the Secretary, Securities and Exchange
Commission, Washington, DC 20549-0609, and serve a copy on the relevant
applicant(s) and/or declarant(s) at the address(es) specified below.
Proof of service (by affidavit or, in the case of an attorney at law,
by certificate) should be filed with the request. Any request for
hearing should identify specifically the issues of facts or law that
are disputed. A person who so requests will be notified of any hearing,
if ordered, and will receive a copy of any notice or order issued in
the matter. After December 6, 2004, the application(s) and/or
declaration(s), as filed or as amended, may be granted and/or permitted
to become effective.
Harbert Distressed Investment Master Fund, Ltd. (70-10259)
Harbert Distressed Investment Master Fund, Ltd., c/o 555 Madison
Avenue, 16th Floor, New York, NY 10022, on its own behalf and on behalf
of funds and
[[Page 67201]]
managed accounts (``Harbert'' and ``Applicant''), has filed an
application (``Application'') requesting an exemption under section
3(a)(4) of the Act from all provisions of the Act except section
9(a)(2).
The Application is filed in connection with Harbert's anticipation
that funds and accounts managed by it will receive, in the aggregate,
more than 10% of the voting securities of a public-utility company, the
reorganized NorthWestern Corporation (``NorthWestern'' and ``Debtor''),
pursuant to Debtor's Second Amended and Restated Plan of Reorganization
dated August 27, 2004 (``Plan of Reorganization'') under Chapter 11 of
the United States Bankruptcy Code (``Chapter 11''), filed in the United
States Bankruptcy Court for the District of Delaware (the ``Bankruptcy
Court'').\1\
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\1\ In re NorthWestern Corp., Case No. 03-12872 (CGC) (Bankr. D.
Del.) (filed Sept. 14, 2003).
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Harbert Management Corporation (``HMC''), founded in 1945, is a
privately held firm that specializes in non-traditional money
management activities. HMC serves pension trusts, endowments and
foundations, pension funds, banks, insurance companies, family offices,
and high net worth individuals. HMC has sponsored numerous funds,
including Harbert. Harbert's investment team also manages a separate
managed account, Alpha Sub US Fund VI, LLC (``Alpha''). HMC has a
diversified portfolio of assets under management. Investments range
across a wide variety of industries; diversification across asset
classes is a fundamental goal.
HMC Investments, Inc., a wholly owned subsidiary of HMC, is a
registered broker/dealer and member NASD, SIPC. The Harbinger Group,
Inc., an indirect wholly owned subsidiary of HMC, is an investment
advisor registered with the Commission.
Applicant states that neither HMC nor any of the funds or accounts
managed by it is currently a ``public-utility company,'' a ``public-
utility holding company,'' or an ``affiliate'' of a public-utility
company or public-utility holding company within the meaning of the
Act.
As detailed in the Disclosure Statement dated August 27, 2004
(``Disclosure Statement''), filed in connection with the Plan of
Reorganization, NorthWestern is a stand-alone public-utility company
engaged in the generation, transmission and distribution of electricity
and the distribution of natural gas to approximately 608,000 customers
in Montana, South Dakota and Nebraska. NorthWestern is subject to the
jurisdiction of the Federal Energy Regulatory Commission with respect
to the issuance of securities and the setting of wholesale electric
rates. Its Montana operations are subject to the jurisdiction of the
Montana Public Service Commission and its South Dakota operations, to
the jurisdiction of the South Dakota Public Utilities Commission.
On September 14, 2003, NorthWestern filed a petition for relief
under Chapter 11. In the succeeding eleven months, NorthWestern, as
debtor-in-possession, negotiated with creditors, state regulators, and
other parties, a plan of reorganization that provides for the
reorganization of the utility as a stand-alone company. In so doing,
NorthWestern has divested nearly all of its interests in nonutility
businesses. Under the Plan of Reorganization, Northwestern's unsecured
creditors will receive pro rata distributions of all of the common
stock of a reorganized NorthWestern (subject only to dilution by
relatively small amounts of stock issued pursuant to a management
incentive plan). NorthWestern will continue to operate as a public-
utility company.
Applicant states that, as part of their investment strategies,
Harbert and Alpha regularly attempt to identify undervalued securities
of financially distressed companies. Both hold publicly traded Senior
Notes of NorthWestern issued in 2002. Harbert acquired these securities
in the ordinary course of its business on behalf of the managed funds
and accounts. Harbert or its administered funds also own beneficially
several issuances of NorthWestern's subordinated debt securities. These
securities were acquired for investment purposes and continue to be
held exclusively for such purposes.
Harbert was active in the reorganization proceedings and engaged in
negotiations with NorthWestern, other creditor groups, and other
parties to develop the Plan of Reorganization. Applicant states that
the Plan of Reorganization has broad support. A hearing on confirmation
was held on August 25, 2004 and concluded on October 6, 2004. The
requested effective date is no later than November 1, 2004.
Under the Plan of Reorganization, the funds and accounts managed by
Harbert expect to receive, in the aggregate, up to a maximum of
approximately 26.5% of the common stock of reorganized NorthWestern, if
Harbert and affiliates were to exercise all available warrants.\2\
Applicant states that it is entitled to exemption under section 3(a)(4)
because it will be ``temporarily a holding company solely by reason of
the acquisition of securities for purposes of liquidation or
distribution in connection with a bona fide debt previously
contracted.'' Harbert requests an exemption under section 3(a)(4) for a
period of up to three years. Harbert plans to reduce its aggregate
holdings to less than 10% of NorthWestern's voting securities in a
manner that will enable Harbert to maximize its return on the
investment over the three-year period.
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\2\ Under the Plan of Reorganization, this percentage could be
affected if certain unsecured creditors elect not to receive
distributions of common stock of reorganized NorthWestern. This
event would increase the percentage of the common stock distributed
to the remaining unsecured creditors, including the Harbert funds
and accounts.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. E4-3169 Filed 11-15-04; 8:45 am]
BILLING CODE 8010-01-P