The macroeconomic impact of the coronavirus (COVID-19) on nearly all industries is forcing businesses directly and indirectly affected by the global pandemic to consider restructuring alternatives. Since prospective businesses looking to reorganize or liquidate through the chapter 11 process are likely to need immediate cash in order to operate their businesses, these companies often will look to existing or third-party lenders (and in certain cases, stalking horse bidders or customer groups) to provide them with debtor-in-possession financing (DIP Financing).

On December 12, 2019, the United States Court of Appeals for the Sixth Circuit (“Sixth Circuit”) issued an opinion affirming in part and reversing in part a bankruptcy court’s assertion of exclusive and unlimited jurisdiction over certain of FirstEnergy Solutions’ (“FES”) power purchase agreements that FERC had previously approved under the Federal Power Act (“FPA”) and that FES sought to reject in bankruptcy.

On May 1, 2019, FERC denied Pacific Gas and Electric Company’s (“PG&E”) requests for rehearing of two prior orders in which FERC held that it and the bankruptcy courts have concurrent jurisdiction to review and address the disposition of wholesale power contracts sought to be rejected through bankruptcy. FERC’s order comes as the PG&E bankruptcy proceedings in the United States Bankruptcy Court for the Northern District of California (“Bankruptcy Court”) remain ongoing.