Omnis Pleasants advanced preparations for its proposed sale of Pleasants Power Station with a September 4, 2026 order approving Houlihan Lokey as investment banker. The dispute over Herbert Smith Freehills Kramer’s retention remains pending: a September 9 agenda states that the court will issue its ruling at a September 11 hearing. Investment-banker retention order; September 11 hearing agenda.
The counsel dispute concerns who can advise the estate about liens granted over the plant to secure borrowing by parent entities. It accompanies a broader challenge by Omnis Fuel Technologies and Quantum Pleasants to the authority and financial justification for the bankruptcy itself. Their August 14 motion seeks dismissal or, alternatively, appointment of a Chapter 11 trustee, as well as vacatur of the interim cash-collateral order. Dismissal motion.
This account reflects court filings reviewed through September 9, 2026 and WTAP’s reporting on the September 3 hearing.
The debtor’s August 13 sale motion seeks a competitive process for all or substantially all of its assets, including the 1,278-megawatt coal-fired plant in Belmont, West Virginia. Management said prepetition outreach generated interest and due diligence by prospective buyers but no actionable offers. The motion sought authority to establish bidding procedures, designate a stalking-horse bidder and conduct an auction if necessary. Sale motion.
The September 4 order authorizes Houlihan Lokey’s employment effective August 3. It approves the investment banker’s retention, without approving a purchaser or sale transaction. Retention order.
HSF Kramer’s proposed retention presents a different issue. The U.S. Trustee argues that the firm’s prepetition work for TRAG and RG Energy creates a disqualifying conflict because it helped negotiate the forbearance agreement under which the debtor pledged assets for debt owed by other entities. The objection says the firm switched to representing the debtor on February 20, approximately two weeks after that agreement. These are the U.S. Trustee’s grounds for opposing retention, rather than findings that the firm is disqualified. U.S. Trustee objection.
The debtor’s September 4 notice records that Judge Owens took the application under advisement after the September 3 hearing. Its further revised proposed order would clarify that Young Conaway Stargatt & Taylor advises the debtor where the estate’s interests are directly adverse to TRAG and RG Energy. The notice contains a proposal submitted after the hearing, not an entered order approving HSF Kramer’s retention. September 4 notice.
The September 9 agenda subsequently scheduled a remote hearing for September 11 at 3 p.m. Eastern. It identifies HSF Kramer’s retention application as the matter going forward and states that the court advised counsel it would issue its ruling. Hearing agenda.
The rejected $75.64 million tender and the control dispute
The governance fight grew out of a February 2026 forbearance arrangement that installed Gilbert Nathan as independent manager and sole director, with David Hindman serving as chief executive through AP Services. Charles Gassenheimer, president of Omnis Fuel Technologies, says the agreement preserved the owners’ ability to refinance the obligations and terminate the governance restrictions through payment in full. Gassenheimer declaration.
According to Gassenheimer, TRAG and RG Energy circulated a July 15 restructuring term sheet identifying $75.64 million as the aggregate outstanding obligation. Dynamic Finance Corporation delivered a check for that amount the next day, and the objecting parties offered to pay any additional properly documented balance. Gassenheimer says Nathan refused to approve the transaction and the lenders refused the check. The amount describes a disputed repayment tender, not cash accepted by the lenders or proceeds received from a plant sale. Gassenheimer declaration, paragraphs 10–14.
Gassenheimer maintains that the tender terminated the forbearance agreement and allowed Quantum, the debtor’s sole member, to remove Nathan and appoint Gassenheimer as interim director on July 20. The dismissal motion likewise challenges the authority to file the bankruptcy petition. These assertions remain the objecting parties’ positions. Gassenheimer declaration; dismissal motion.
Omnis Fuel Technologies and Quantum also argue that the debtor lacked genuine financial distress, pointing to approximately $13 million of cash and projected capacity revenue. Hindman’s declaration describes defaulted obligations, operational problems and regulatory exposure. His declaration also acknowledges substantial projected capacity revenue, so the parties’ disagreement concerns the significance of the debtor’s financial condition and obligations, rather than the existence of capacity payments. Dismissal motion; first-day declaration, paragraphs 25–26 and 40–45.
Debt obligations and disputed collateral rights
The initial capital-structure disclosure distinguishes obligations owed or guaranteed by Pleasants from loans to its parent entities secured by asserted liens over the plant. Combining them into a single debt figure would obscure the dispute over the lenders’ recourse.
Exposure
Petition-date disclosure
Qualification
West Virginia Economic Development Authority loan
Approximately $50.9 million outstanding
Quantum borrowed the money; Pleasants guaranteed it
Bilt Technology note
Approximately $20 million outstanding
Described by the debtor as unsecured and under investigation
TRAG and RG Energy loans
More than $80 million owed under parent-entity loan agreements
Hindman describes liens on Pleasants’ assets; the owners contest the asserted rights
Purported intercompany balances
Approximately $46 million plus purported accrued interest
Legitimacy remained under investigation in the first-day declaration
Trade debt
Approximately $4 million
Petition-date amount reported by the debtor
Liquidity
Approximately $13 million, primarily cash
Available liquidity, not a new financing commitment
Petition-Date Obligations and Liquidity
These figures come from Hindman’s first-day declaration and are not updated balances or allowed claims. The owners’ dismissal motion distinguishes personal liability for the parent borrowing from any security interest in the debtor’s property and reserves challenges to lien validity, enforceability and priority. First-day declaration, paragraphs 40–45; dismissal motion.
The state lender also challenges proposed protections for TRAG and RG Energy. In its August 27 objection, WVEDA argues against restrictions on alternative financing, collateral challenges and restructuring plans. It also objects to proposed credit-bid concessions that could discourage competing bids and seeks limits on adequate-protection liens over previously unencumbered assets. Those objections describe relief WVEDA sought, without establishing which provisions the court ultimately approved. WVEDA objection.
The Reformer project and management’s allegations
Omnis Fuel Technologies, through Quantum, acquired the plant-owning entity from Energy Transition Environmental Management in August 2023. The entity was then renamed Omnis Pleasants. The plant operates within the PJM market and earns revenue from both capacity commitments and electricity sales. Hindman declaration, paragraphs 21–24.
Hindman alleges that prior management under Simon Hodson diverted attention and resources toward the Reformer hydrogen project while the power plant lacked working capital. His declaration describes fuel shortages, deterioration in supplier relationships and loss of access to an ash-disposal landfill for nonpayment. These allegations are management’s account, not adjudicated findings of misconduct. Hindman declaration, paragraphs 46–52.
Hindman separately identifies a Federal Energy Regulatory Commission investigation into the plant’s operations during 2023–2025 and certain affiliates. He says its outcome could expose Pleasants to disgorgement of capacity revenue or fines. Hindman declaration, paragraph 26.
The declaration attributes the investigation of alleged misuse of state-loan proceeds to the debtor and its advisers. Hindman says WVEDA fully disbursed its $50 million loan to Quantum by June 2024, with Pleasants guaranteeing repayment. He alleges that circular transfers involving Omnis Energy and StarSource were presented as qualifying expenditures for the loan’s matching-fund requirements. The cited passages do not establish that these loan transactions were part of FERC’s investigation. Hindman declaration, paragraphs 40 and 53–55.
Hearings and unresolved decisions
The next identified proceeding is the September 11 hearing at which the court is scheduled to rule on HSF Kramer’s retention application. The September 9 agenda does not disclose the outcome. Retention hearing agenda.
WTAP reported that, at the September 3 hearing, Judge Owens kept the sale process on track for a November 18 hearing and scheduled the dismissal dispute for trial in December. Those dates describe reported future proceedings, not a completed sale or a decision on dismissal. WTAP’s September 7 hearing report.
A September 8 notice separately reschedules the October omnibus hearing to October 13 at 9:30 a.m. Eastern, continuing October 14 at the same time if necessary. Rescheduled hearing notice.
Sources
Investment-banker retention order /documents/54fbaf70-50c5-4403-9695-82ae183c2703/
September 11 hearing agenda /documents/a7e5c218-57bb-4fba-8559-aa600938dee9/
WTAP’s September 7 hearing report https://www.wtap.com/2026/09/07/bankruptcy-judge-weighs-law-firm-conflict-claims-pleasants-power-station-case/
This article was researched and written with AI assistance, using court filings, public records, and news sources. AI-generated content can contain errors. Verify all information against primary sources before relying on it. This is not legal or financial advice. See the disclaimer.