Mirant shareholders getting bankruptcy payouts

By David Markiewicz

The Atlanta Journal-Constitution

Six years after the old Mirant Corp. tumbled into bankruptcy, and more than three years after it emerged, former shareholders are starting to get what’s coming to them.

It amounts to 12 1/2 cents per share. The payoff will arrive in the form of electronic credits to brokerage accounts or, in some cases, checks in the mail. The Atlanta company said payments are going out now but a spokesman could not say when they will be completed.

Once, Mirant shares traded for more than $40. Some shareholders, many of them in the metro area, lost millions when the company collapsed.

Newnan shareholder John Thrasher expects a payment of about $7,500 and considers that a victory. Often common stockholders are wiped out in a bankruptcy case.

“Anyone who knows the history of what typically happens (in these situations) would have to agree it was a long shot at best that the common share holder would recover anything,” said Thrasher.

The payment process began in March when Atlanta-based Southern Co. agreed to settle a four-year-long legal fight with Mirant, its former subsidiary.

Southern agreed to pay $202 million, ending its piece of the case. Common stockholders, who held 405 million shares, will only get about $50 million of that, however. Creditors will get the same amount.

Mirant was formed in 1993 to enter the new, competitive energy industry pioneered by Enron Corp. It expanded around the world. But when Enron collapsed in scandal the pall carried over to other firms in the industry, including Mirant.

Southern had spun off Mirant in 2001, with Southern shareholders getting much of Mirant’s stock. Bankruptcy came in 2003.

Mirant sued Southern in 2005 asking for more than $2 billion, charging that it had loaded Mirant with debt from overpriced acquisitions and spun it off knowing it was essentially insolvent.

“A lot of people disproportionately invested in Mirant because they believed it was such a great value,” said Neil Roghair, a Dallas shareholder who estimated his loss at about $1.5 million.

“I thought I was value investing,” he said, “and it turned out it was all a deck of cards, and it imploded.”

He added, “It’s been a long, painful road.”

Mirant emerged from bankruptcy reorganization in early 2006 and continues to operate.