Exhibit 99.2

THIS IS NOT A SOLICITATION OF ACCEPTANCE OR REJECTION OF THE PLAN.  ACCEPTANCES OR REJECTIONS MAY NOT BE SOLICITED UNTIL A DISCLOSURE STATEMENT HAS BEEN APPROVED BY THE BANKRUPTCY COURT.  THIS DISCLOSURE STATEMENT IS BEING SUBMITTED FOR APPROVAL BUT HAS NOT BEEN APPROVED BY THE BANKRUPTCY COURT.

DISCLOSURE STATEMENT RELATED TO THE CHAPTER 11 PLAN
OF REORGANIZATION FOR DYNEGY HOLDINGS, LLC
PROPOSED BY DYNEGY HOLDINGS, LLC AND DYNEGY INC.

Dated:  December 1, 2011

(1)                                  The Debtors, together with the last four digits of each Debtor’s federal tax identification number, are Dynegy Holdings, LLC (8415); Dynegy Northeast Generation, Inc. (6760); Hudson Power, L.L.C. (NONE); Dynegy Danskammer, L.L.C. (9301); and Dynegy Roseton, L.L.C. (9299).  The location of the Debtors’ corporate headquarters and the service address for Dynegy Holdings, LLC, Dynegy Northeast Generation, Inc. and Hudson Power, L.L.C. is 1000 Louisiana Street, Suite 5800, Houston, Texas 77002.  The location of the service address for Dynegy Roseton, L.L.C. is 992 River Road, Newburgh, New York 12550.  The location of the service address for Dynegy Danskammer, L.L.C. is 994 River Road, Newburgh, New York 12550.

TABLE OF CONTENTS

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SCHEDULES AND EXHIBITS

*      Included as Exhibit 99.1 to the Current Report on Form 8-K filed December 2, 2011.

**   Exhibits not included in the Current Report on Form 8-K filed December 2, 2011, such Exhibits will be filed with the Bankruptcy Court at a later date not yet determined.

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I.

INTRODUCTION

THIS DISCLOSURE STATEMENT RELATES TO A PLAN FOR DYNEGY HOLDINGS, LLC ONLY, AND NOT THE OTHER DEBTORS (DYNEGY NORTHEAST GENERATION, INC., HUDSON POWER, L.L.C., DYNEGY DANSKAMMER, L.L.C., AND DYNEGY ROSETON, L.L.C.) IN THESE CHAPTER 11 CASES.

All capitalized terms used in this Disclosure Statement but not defined in this Disclosure Statement shall have the meaning ascribed to them in the Plan (see Exhibit “A” to the Plan, Glossary of Defined Terms).  For ease of reference, all terms defined in this Disclosure Statement are listed on Schedule 1 hereto with reference to the page number where the term is defined.  Unless otherwise stated, all references herein to “Schedules” and “Exhibits” are references to schedules and exhibits to this Disclosure Statement, respectively.

BY ORDER DATED                            (THE “DISCLOSURE STATEMENT ORDER”), THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF NEW YORK (THE “BANKRUPTCY COURT”) APPROVED THE DISCLOSURE STATEMENT RELATING TO THE CHAPTER 11 PLAN OF REORGANIZATION FOR DYNEGY HOLDINGS, LLC (“DH”) PROPOSED BY DH AND DYNEGY INC. (“DYNEGY” AND TOGETHER WITH DH, THE “PLAN PROPONENTS”).  THIS DISCLOSURE STATEMENT INCLUDES AND DESCRIBES THE CHAPTER 11 PLAN OF REORGANIZATION FOR DYNEGY HOLDINGS, LLC PROPOSED BY DYNEGY HOLDINGS, LLC AND DYNEGY INC., DATED DECEMBER 1, 2011 (THE “PLAN”), A COPY OF WHICH IS ATTACHED HERETO AS EXHIBIT “A.”  PURSUANT TO THE PLAN, CLASS 1 — PRIORITY CLAIMS, CLASS 2 — SECURED CLAIMS, CLASS 4 — CONVENIENCE CLAIMS AND CLASS 5 — EQUITY INTERESTS ARE UNIMPAIRED AND ARE THEREFORE DEEMED TO HAVE ACCEPTED THE PLAN.  ACCORDINGLY, THE PLAN PROPONENTS ARE ONLY SOLICITING ACCEPTANCES OF THE PLAN FROM THE HOLDERS OF CLASS 3 — GENERAL UNSECURED CLAIMS.

THE PLAN IS THE PRODUCT OF EXTENSIVE NEGOTIATIONS BETWEEN AND AMONG, AND IS SUPPORTED BY, THE PLAN PROPONENTS AND AN AD HOC GROUP OF HOLDERS OF APPROXIMATELY $1.4 BILLION OF SENIOR NOTES (THE “CONSENTING NOTEHOLDERS”).  THE PLAN PROPONENTS AND THE CONSENTING NOTEHOLDERS BELIEVE THAT THE PLAN IS IN THE BEST INTEREST OF AND PROVIDES THE HIGHEST AND MOST EXPEDITIOUS RECOVERIES AVAILABLE TO ALL HOLDERS OF CLAIMS, INCLUDING HOLDERS OF CLASS 3 — GENERAL UNSECURED CLAIMS.  ALL HOLDERS OF CLASS 3 — GENERAL UNSECURED CLAIMS ARE URGED TO VOTE IN FAVOR OF THE PLAN.

VOTING INSTRUCTIONS ARE CONTAINED IN THE DISCLOSURE STATEMENT ORDER, A TRUE AND CORRECT COPY OF WHICH IS ATTACHED HERETO AS

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EXHIBIT “B.”  IN ADDITION, THE SOLICITATION PACKAGE ACCOMPANYING EACH OF THE BALLOTS CONTAINS APPLICABLE VOTING INSTRUCTIONS.  TO BE COUNTED, YOUR BALLOT MUST BE DULY COMPLETED, EXECUTED AND ACTUALLY RECEIVED BY 5:00 P.M. (PREVAILING EASTERN TIME), ON                                   , 2012 (THE “VOTING DEADLINE”).

II.

NOTICE TO HOLDERS OF CLAIMS

The purpose of this Disclosure Statement is to enable each holder of a Claim that is impaired under the Plan to make an informed decision in exercising its right to vote on the Plan.  More information on voting on the Plan is contained in this Disclosure Statement in the article entitled “Confirmation and Consummation Procedures.”

THIS DISCLOSURE STATEMENT CONTAINS IMPORTANT INFORMATION THAT MAY BEAR UPON YOUR DECISION TO ACCEPT OR REJECT THE PLAN.  PLEASE READ THIS DOCUMENT WITH CARE.

PLAN SUMMARIES AND STATEMENTS MADE IN THIS DISCLOSURE STATEMENT ARE QUALIFIED IN THEIR ENTIRETY BY REFERENCE TO THE PLAN AND THE EXHIBITS ANNEXED TO THE PLAN AND TO THE EXHIBITS AND SCHEDULES ANNEXED TO THIS DISCLOSURE STATEMENT.  THE STATEMENTS CONTAINED IN THIS DISCLOSURE STATEMENT ARE MADE ONLY AS OF THE DATE HEREOF, AND THERE CAN BE NO ASSURANCE THAT THE STATEMENTS CONTAINED HEREIN WILL BE CORRECT AT ANY TIME AFTER THE DATE HEREOF.  IN THE EVENT OF ANY CONFLICT BETWEEN THE DESCRIPTIONS SET FORTH IN THIS DISCLOSURE STATEMENT AND THE TERMS OF THE PLAN, THE TERMS OF THE PLAN SHALL GOVERN.

THIS DISCLOSURE STATEMENT HAS BEEN PREPARED IN ACCORDANCE WITH SECTION 1125 OF THE BANKRUPTCY CODE AND RULE 3016(b) OF THE FEDERAL RULES OF BANKRUPTCY PROCEDURE (THE “BANKRUPTCY RULES”) AND NOT NECESSARILY IN ACCORDANCE WITH FEDERAL OR STATE SECURITIES LAW OR OTHER NON-BANKRUPTCY LAW.  THIS DISCLOSURE STATEMENT HAS NEITHER BEEN APPROVED NOR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION (THE “SEC”), NOR HAS THE SEC PASSED UPON THE ACCURACY OR ADEQUACY OF THE STATEMENTS CONTAINED HEREIN.  PERSONS OR ENTITIES TRADING IN OR OTHERWISE PURCHASING, SELLING OR TRANSFERRING SECURITIES OR CLAIMS OF PLAN PROPONENTS OR ANY OF THEIR SUBSIDIARIES OR AFFILIATES SHOULD EVALUATE THIS DISCLOSURE STATEMENT AND THE PLAN IN LIGHT OF THE PURPOSE FOR WHICH THEY WERE PREPARED.

AS TO CONTESTED MATTERS, ADVERSARY PROCEEDINGS AND OTHER ACTIONS OR THREATENED ACTIONS, THIS DISCLOSURE STATEMENT SHALL NOT CONSTITUTE OR BE CONSTRUED AS AN ADMISSION OF ANY FACT OR

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LIABILITY, STIPULATION, OR WAIVER, BUT RATHER AS A STATEMENT MADE IN SETTLEMENT NEGOTIATIONS SUBJECT TO RULE 408 OF THE FEDERAL RULES OF EVIDENCE AND OTHER SIMILAR RULES.  ACCORDINGLY, THIS DISCLOSURE STATEMENT SHALL NOT BE ADMISSIBLE IN ANY NON-BANKRUPTCY PROCEEDING NOR SHALL IT BE CONSTRUED TO BE CONCLUSIVE ADVICE ON THE TAX, SECURITIES, OR OTHER LEGAL EFFECTS OF THE PLAN AS TO HOLDERS OF CLAIMS AGAINST, OR EQUITY INTERESTS IN, DH OR ANY OF ITS SUBSIDIARIES OR AFFILIATES.

On                        , 2012 after notice and a hearing, the Bankruptcy Court entered the Disclosure Statement Order pursuant to section 1125 of the Bankruptcy Code, finding that this Disclosure Statement contains information of a kind, and in sufficient detail, adequate to enable a hypothetical, reasonable investor typical of the solicited holders of Claims against DH to make an informed judgment with respect to the acceptance or rejection of the Plan.  APPROVAL OF THIS DISCLOSURE STATEMENT BY THE BANKRUPTCY COURT DOES NOT CONSTITUTE A DETERMINATION BY THE BANKRUPTCY COURT OF THE FAIRNESS OR MERITS OF THE PLAN OR OF THE ACCURACY OR COMPLETENESS OF THE INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT.

Each holder of a Claim entitled to vote to accept or reject the Plan should read each of this Disclosure Statement and the Plan in its entirety before voting.  No solicitation of votes to accept or reject the Plan may be made except pursuant to this Disclosure Statement and section 1125 of the Bankruptcy Code.  Except for the Plan Proponents and certain of the professionals they have retained, no person has been authorized to use or promulgate any information concerning DH, its businesses, or the Plan other than the information contained in this Disclosure Statement, and if other information is given or made, such information may not be relied upon as having been authorized by the Plan Proponents.  YOU SHOULD NOT RELY ON ANY INFORMATION RELATING TO DH, ITS BUSINESSES OR THE PLAN OTHER THAN THAT CONTAINED IN THIS DISCLOSURE STATEMENT AND THE SCHEDULES AND EXHIBITS ANNEXED HERETO.

After carefully reviewing this Disclosure Statement, including the attached Schedules and Exhibits, please indicate your acceptance or rejection of the Plan by voting in favor of or against the Plan on the enclosed ballot, and return the completed ballot to the address set forth on the ballot in the enclosed postage prepaid return envelope so that it will be actually received by Epiq Bankruptcy Solutions, LLC (“Epiq” or the “Solicitation Agent” or the “Claims Agent,” as applicable), no later than the Voting Deadline.  All votes to accept or reject the Plan must be cast by using the appropriate ballot.  Votes which are cast in any other manner will not be counted.  All ballots must be actually received by the Solicitation Agent no later than the Voting Deadline:                                , 2012 at 5:00 p.m., Prevailing Eastern Time.  For detailed voting instructions and the name, address and phone number of the person you may contact if you have questions regarding the voting procedures, see the Disclosure Statement Order attached hereto as Exhibit “B.”

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DO NOT RETURN ANY OTHER DOCUMENTS WITH YOUR BALLOT.

You will be bound by the Plan if it is accepted by the requisite holders of Claims and confirmed by the Bankruptcy Court, even if you do not vote to accept the Plan or if you are the holder of an unimpaired Claim or Equity Interest that is not entitled to vote on the Plan.  The Consenting Noteholders, which hold in the aggregate approximately $1.4 billion of the $3.37 billion of Senior Notes included in Class 3 — General Unsecured Claims, have agreed to vote to accept the Plan.  See “General Information — Restructuring Support Agreement.”  Class 3 — General Unsecured Claims will have accepted the Plan if the holders of at least two-thirds in amount and more than one-half in number of the Claims entitled to vote and actually voting in such class have accepted the Plan.  See “Confirmation and Consummation Procedures.”  Further information concerning the minimum thresholds required to constitute acceptance of the Plan for the purposes of confirmation is contained in Article XII herein entitled “Confirmation and Consummation Procedures.”

Pursuant to section 1128 of the Bankruptcy Code, the Bankruptcy Court has scheduled a hearing to consider confirmation of the Plan (the “Confirmation Hearing”) on                     , 2012, at                   .m., Prevailing Eastern Time, before the Honorable Cecelia G. Morris, United States Bankruptcy Judge.  The Bankruptcy Court has directed that objections, if any, to confirmation of the Plan be filed and served on or before                      , 2012, in the manner described in the Disclosure Statement Order attached hereto as Exhibit “B.”

THE PLAN PROPONENTS AND THE CONSENTING NOTEHOLDERS URGE ALL HOLDERS OF CLASS 3 — GENERAL UNSECURED CLAIMS TO ACCEPT THE PLAN.

III.

ADDITIONAL INFORMATION AND INCORPORATION BY REFERENCE

Dynegy and DH have filed annual and quarterly reports and other information with the SEC.  Holders of Claims entitled to vote on the Plan may read and copy any reports, statements and other information that Dynegy and DH file at the SEC’s public reference room located at 100 F Street, NE, Washington, D.C. 20549 and request copies of the documents, upon payment of a duplicating fee, by writing the Public Reference Section of the SEC.  Please call 1-800-SEC-0330 for further information on the public reference rooms. Dynegy’s and DH’s filings will also be available to the public from commercial document retrieval services and at the web site maintained by the SEC at http://www.sec.gov.  The reports that Dynegy and DH file are also available free of charge on Dynegy’s website at http://www.dynegy.com.  Information on Dynegy’s website does not constitute part of this Disclosure Statement, is not incorporated by reference in this Disclosure Statement and should not be relied upon in connection with making any decision with respect to voting for the Plan.

The Plan Proponents “incorporate by reference” information into this Disclosure Statement. This means the Plan Proponents disclose important information to the holders of Claims entitled to vote on the Plan by referring such holders to another document filed separately

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with the SEC.  The information in the documents incorporated by reference is considered to be part of this Disclosure Statement, and information in documents that Dynegy and DH file later with the SEC will automatically update and supersede this information. The Plan Proponents  incorporate by reference the documents listed below filed by Dynegy and DH under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These documents contain important information about them and their financial condition.

·                  Annual Report on Form 10-K of Dynegy and DH for the fiscal year ended December 31, 2010;

·                  Quarterly Reports on Form 10-Q of Dynegy and DH for the periods ended March 31, 2011 and June 30, 2011;

·                  Quarterly Report on Form 10-Q of Dynegy for the period ended September 30, 2011;

·                  Current Reports on Form 8-K or 8-K/A of Dynegy and DH filed on January 25, 2011, January 26, 2011, February 8, 2011, February 11, 2011, February 14, 2011, February 23, 2011, March 1, 2011, April 11, 2011, June 10, 2011, June 21, 2011, June 28, 2011, July 11, 2011, August 1, 2011, August 26, 2011, September 12, 2011, September 26, 2011, October 14, 2011, November 2, 2011 and November 8, 2011 (to the extent such reports are filed);

·                  Current Reports on Form 8-K or 8-K/A of Dynegy filed on March 10, 2011, March 22, 2011, May 5, 2011, November 14, 2011, November 17, 2011 and November 22, 2011 (to the extent such reports are filed);

·                  Current Report on Form 8-K of DH filed on September 8, 2011; and

·                  Definitive Proxy Statement on Schedule 14A of Dynegy filed April 29, 2011.

Holders of Claims entitled to vote on the Plan can also obtain from the Plan Proponents, as applicable, without charge, copies of any document incorporated by reference in this Disclosure Statement, excluding exhibits (unless the exhibit is specifically incorporated by reference into the information that this Disclosure Statement incorporates, in which case the Plan Proponents may charge a nominal fee to cover its expenses) by requesting such materials in writing or by telephone from Dynegy at:

Dynegy Inc.

Attention: Investor Relations

1000 Louisiana Street, Suite 5800

Houston, Texas 77002

(713) 507-6400

IV.

SUMMARY EXPLANATION OF CHAPTER 11

A.                                    Overview of Chapter 11

Chapter 11 is the principal reorganization chapter of the Bankruptcy Code pursuant to which a debtor may reorganize its business for the benefit of its creditors, equity interest holders,

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and other parties in interest.  DH and certain of its direct and indirect subsidiaries (the “Debtors”)(1) commenced the Chapter 11 Cases with the filing of petitions for voluntary protection under chapter 11 of the Bankruptcy Code on November 7, 2011.  By order of the Bankruptcy Court, the Chapter 11 Cases have been consolidated for procedural purposes only and are being jointly administered under Case No. 11-38111 (CGM).

The commencement of a chapter 11 case creates an estate comprising all of the legal and equitable interests of a debtor as of the date the petition is filed.  Sections 1101, 1107, and 1108 of the Bankruptcy Code provide that a debtor may continue to operate its business and remain in possession of its property as a “debtor in possession” unless the bankruptcy court orders the appointment of a trustee.  In the Chapter 11 Cases, DH and each of the other Debtors remain in possession of their property and continue to operate their businesses as debtors in possession.

The filing of a chapter 11 petition triggers the automatic stay provisions of the Bankruptcy Code.  Section 362 of the Bankruptcy Code provides, among other things, for an automatic stay of all actions against a debtor on account of prepetition claims against it and various other forms of interference with a debtor’s property or business.  Exempted from the automatic stay are, among other things, actions by governmental authorities seeking to exercise police or regulatory powers.  Except as otherwise ordered by the bankruptcy court administering a chapter 11 case, the automatic stay remains in full force and effect until the effective date of a confirmed plan of reorganization.

The formulation and ultimate consummation of a plan of reorganization is the principal purpose of a chapter 11 case.  The plan sets forth the means for satisfying claims against and interests in a debtor’s estate.  Unless a trustee is appointed, only a debtor may file a plan during the first 120 days of a chapter 11 case (the “Exclusive Filing Period”), and the debtor will have 180 days to solicit acceptance of such plan (the “Exclusive Solicitation Period”).  However, section 1121(d) of the Bankruptcy Code permits the bankruptcy court to extend or reduce the Exclusive Filing Period and Exclusive Solicitation Period upon a showing of “cause.”  The Exclusive Filing Period and Exclusive Solicitation Period may not be extended beyond 18 months and 20 months, respectively, from the Petition Date.  The Plan was filed within the Exclusive Filing Period.  To the extent that DH believes it may be unable to secure acceptance of the Plan within the Exclusive Solicitation Period, DH may seek to extend that period.  So long as the Exclusive Solicitation Period continues, and so long as no trustee is appointed in the Chapter 11 Case of DH, only DH (or Persons authorized by DH) shall be entitled to file and solicit a plan of reorganization.

B.                                    Plan of Reorganization

Although referred to simply as a plan of reorganization, a plan may provide for anything from a comprehensive restructuring of a debtor’s business and its related obligations to a simple liquidation of a debtor’s assets.  In either event, upon confirmation of a plan, the plan becomes binding on the debtor and all of its creditors and equity holders, and the prior obligations owed by the debtor to such parties are compromised and exchanged for the obligations specified in the

(1)                                  The Debtors are Dynegy Holdings, LLC; Dynegy Northeast Generation, Inc.; Hudson Power, L.L.C. Dynegy Danskammer, L.L.C.; and Dynegy Roseton, L.L.C.

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plan.  For a description of key components of the Plan, refer to the article of this Disclosure Statement entitled “Overview of the Plan.”

After a plan of reorganization has been filed, the holders of impaired claims against and equity interests in a debtor are permitted to vote to accept or reject the plan.  Before soliciting acceptances of the proposed plan, section 1125 of the Bankruptcy Code requires the debtor to prepare and file a disclosure statement containing adequate information of a kind, and in sufficient detail, to enable a hypothetical reasonable investor to make an informed judgment about the plan.  This Disclosure Statement is presented to holders of Claims against DH to satisfy the requirements of section 1125 of the Bankruptcy Code in connection with the Plan Proponents’ solicitation of votes on the Plan.

C.                                    Confirmation of a Plan of Reorganization

If all classes of claims and equity interests accept a plan of reorganization, the bankruptcy court may confirm the plan if the bankruptcy court independently determines that the requirements of section 1129(a) of the Bankruptcy Code have been satisfied.  These requirements are discussed in this Disclosure Statement in the article entitled “Confirmation and Consummation Procedures.”  The Plan Proponents believe that the Plan satisfies all the applicable requirements of section 1129(a) of the Bankruptcy Code.

Chapter 11 of the Bankruptcy Code does not require that each holder of a claim or interest in a particular class vote in favor of a plan for the bankruptcy court to determine that the class has accepted the plan.  Further information concerning minimum thresholds required to constitute acceptance of the Plan for the purposes of confirmation is contained in this Disclosure Statement in the article entitled “Confirmation and Consummation Procedures.”

Classes of claims or equity interests that are not “impaired” under a plan of reorganization are conclusively presumed to have accepted the plan and thus are not entitled to vote.  Thus, acceptances of a plan will generally be solicited only from those persons who hold claims or equity interests in an impaired class.  Under the Plan, Class 1 — Priority Claims, Class 2 — Secured Claims, Class 4 — Convenience Claims, and Class 5 — Equity Interests are unimpaired classes and Class 3 — General Unsecured Claims is the only impaired class.  Accordingly, only holders of Class 3 — General Unsecured Claims are entitled to vote on the Plan.

V.

OVERVIEW OF THE PLAN

The following is an overview of the Plan.  It is qualified in its entirety by reference to the full text of the Plan, which is attached to this Disclosure Statement as Exhibit “A.”  In addition, for a more detailed description of the terms and provisions of the Plan, refer to the article of this Disclosure Statement entitled “The Chapter 11 Plan.”

As noted above, this is a plan of reorganization for DH only, and not the other Debtors in these Chapter 11 Cases.  The Plan provides for the treatment of Claims against and Equity Interests in DH.  It further provides for the settlement of all Claims and Causes of Action arising from or related to the Prepetition Restructurings, including the Prepetition Lawsuits.  As part of

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this settlement, Dynegy will provide substantial consideration under the Plan, consisting of Cash, the Plan Secured Notes, and the Plan Preferred Stock, all as described more fully below.  Such consideration shall provide significant recoveries to holders of Claims against DH, including certain of those Persons who are plaintiffs in the Prepetition Lawsuits.  As such, if the Plan is confirmed and the Effective Date occurs, for and in consideration of the undertakings and other agreements of Dynegy under and in connection with the Plan, all Claims and Causes of Action arising from or related to the Prepetition Restructurings, including the Prepetition Lawsuits, will be released and permanently and forever stayed, restrained and enjoined.

The Plan Proponents believe that the settlement and compromise proposed in the Plan and the resulting treatment provided under the Plan to holders of Claims against DH offer the best alternative to DH and its stakeholders.

Accordingly, the Plan Proponents urge holders of Class 3 — General Unsecured Claims to vote to accept the Plan.  The Consenting Noteholders, which hold in the aggregate approximately $1.4 billion of the $3.37 billion of Senior Notes included in Class 3 — General Unsecured Claims, have agreed to vote to accept the Plan.  See “General Information — Restructuring Support Agreement.”  Class 3 — General Unsecured Claims will have accepted the Plan if the holders of at least two-thirds in amount and more than one-half in number of the Claims entitled to vote and actually voting in such class have accepted the Plan.  See “Confirmation and Consummation Procedures.”

A.                                    Summary of the Terms of the Plan

The Plan is built around the following key elements, which are qualified in their entirety by reference to the full text of the Plan.

·                                          The Plan Settlement:(2)

·                                          Dynegy shall issue to DH for the benefit of holders of Allowed General Unsecured Claims against DH, in accordance with and pursuant to the Plan, (i) the Plan Cash Payment, (ii) the Plan Preferred Stock, and (iii) either (A) the Plan Secured Notes or (B), in lieu of the Plan Secured Notes, the Plan Secured Notes Alternative Payment; and DH shall thereafter cause such property to be distributed to the holders of Allowed General Unsecured Claims in accordance with and pursuant to the Plan.

(2)                                  As discussed herein and in the Plan, to implement the settlement and compromise in the most efficient manner, Dynegy will form a wholly-owned direct subsidiary, New DH, as a Delaware corporation, which will then form a wholly-owned direct subsidiary, Legacy DH, as a Delaware limited liability company.  Dynegy will contribute to New DH its 100% equity interest in DH, and DH will then merge with Legacy DH, with Legacy DH as the surviving entity.  Substantially all of the assets of Legacy DH will then be transferred to New DH.  The equity interests in Legacy DH will then be transferred to the Plan Trust, which will be administered by the Plan Trust Administrator.

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·                                          Dynegy and DH shall cause Dynegy Gas Investments, LLC (“DGIN”) to cancel the DH Note and deem such DH Note fully satisfied and extinguished;

·                                          Legacy DH (as successor to DH) and Dynegy shall cancel the Undertaking Agreement and Dynegy’s obligations under such Undertaking Agreement shall be deemed to be fully satisfied and extinguished;

·                                          Legacy DH (as successor to DH) shall transfer to New DH (a newly formed, wholly-owned subsidiary of Dynegy) 100% of the equity interests in DGIN;

·                                          DH, its non-Debtor Affiliates, its Estate, and the Plan Proponents shall release, and be deemed to have released, all Claims and Causes of Action of the types described in Section 8.13 of the Plan against all persons and entities referenced in such Section 8.13 of the Plan; and

·                                          Holders of Claims or Causes of Action arising from or related to the Prepetition Restructurings, including the Prepetition Lawsuits, shall be enjoined from taking any action in respect of or on account of such Claims or Causes of Action against DH and all successors thereto, Dynegy or its non-Debtor Affiliates, or any of their current or former respective members, equity holders, directors, managers, officers, employees, agents, and professionals, successors and assigns or their respective assets and property.

·                                          Treatment afforded Class 3 — General Unsecured Claims under the Plan:

·                                          Class 3 — General Unsecured Claims shall consist of all General Unsecured Claims against DH, which specifically includes all Senior Notes Claims, Subordinated Notes Claims, and Lease Guaranty Claims.

·                                          Except to the extent that a holder of an Allowed General Unsecured Claim against DH and the Plan Proponents agree on less favorable treatment for such holder, each holder of an Allowed General Unsecured Claim against DH shall receive, on the Effective Date, a Pro Rata Share of (i) the Plan Cash Payment, (ii) the Plan Preferred Stock, and (iii) at the sole option of Dynegy, in its capacity as a Plan Proponent, either (a) the Plan Secured Notes or (b) the Plan Secured Notes Alternative Payment.

·                                          The Plan Cash Payment is a Cash payment to be provided by Dynegy in the amount of $400 million, subject to adjustment as set forth in Section 8.5 of the Plan and described below, plus an amount equal to the interest that would have accrued on $1 billion aggregate principal amount of Plan Secured Notes had such Plan Secured Notes been issued on the Petition Date.

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·                                          The Plan Secured Notes will be 11% Senior Secured Notes due 2018 issued by Dynegy in the aggregate principal amount of $1 billion, subject to adjustment as set forth in Sections 8.5 and 12.3 of the Plan, which Plan Secured Notes shall, subject to certain exceptions and permitted liens, be secured by (i) a first-priority security interest on the Plan Secured Notes Debt Service Account and all of the presently-owned and after-acquired assets of the direct and indirect wholly-owned subsidiaries of Dynegy (excluding (a) Dynegy Gas Investments Holdings, LLC and Dynegy Coal Investments Holdings, LLC and their respective subsidiaries, (b) DH (except for the equity interests in DGIN covered in clause (ii) below) and (c) Dynegy Northeast Generation, Inc. (“DNE”) and its direct and indirect subsidiaries); and (ii) a first-priority pledge of the equity interests in each of the direct and indirect subsidiaries of Dynegy, including Dynegy Gas HoldCo, LLC, Dynegy Coal HoldCo, LLC, Dynegy Gas Investments Holdings, LLC and Dynegy Coal Investments Holdings, LLC (but excluding (a) each of the Ring-Fenced Entities (as defined in the “Description of the New Secured Notes” attached to the Plan as Exhibit “C” (the “Notes Description”) that are direct and indirect subsidiaries of Dynegy Gas Investments Holdings, LLC and Dynegy Coal Investments Holdings, LLC and (b) DNE and its direct and indirect subsidiaries.

·                                          Pursuant to Sections 12.2 and 12.3 of the Plan, the effectiveness of the Plan is conditioned on the satisfaction or waiver of certain conditions precedent to the Effective Date, including, among other things, that the Lease Guaranty Claims are Allowed or estimated in an aggregate amount that does not exceed $300 million.  If the Lease Guaranty Claims are Allowed or estimated as set forth in the Plan in an aggregate amount that is less than $300 million, the aggregate principal amount of Plan Secured Notes to be issued pursuant to the Plan shall be reduced by an amount to be determined for every dollar such Lease Guaranty Claims are less than $300 million.  If the Lease Guaranty Claims are Allowed or estimated as set forth in the Plan in an aggregate amount that exceeds $300 million and the condition precedent to the occurrence of the Effective Date described in this paragraph is waived in accordance with the terms of the Plan, the aggregate principal amount of Plan Secured Notes to be issued pursuant to the Plan shall be increased by an amount to be determined for every dollar such Lease Guaranty Claims exceed $300 million.  The adjustment amounts left to be determined shall be (i) an amount that is the same for an increase or decrease in the aggregate principal amount of Plan Secured Notes, (ii) agreed to among the Plan Proponents and Requisite Consenting Noteholders, and (iii) identified in a Plan Document to be filed with the Bankruptcy Court not less than ten (10) days prior to the Plan Objection Deadline.

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·                                          Pursuant to Section 8.5 of the Plan, the aggregate amount of the Plan Cash Payment to be issued is subject to increase, with a corresponding dollar-for-dollar reduction in the aggregate principal amount of the Plan Secured Notes to be issued on the Effective Date, by the amount of Cash held by DH and certain of its Affiliates in excess of the sum of (i) $200 million (including, for this purpose, any funds in the Plan Secured Notes Debt Service Account, but excluding, for this purpose, the Plan Cash Payment) and (ii) any Cash reserved in an amount agreed to by the Plan Proponents and the Requisite Consenting Noteholders to pay (on the Effective Date, or thereafter as contemplated by the Plan) Allowed Administrative Claims and other Allowed Claims pursuant to and in accordance with the Plan and to fund the Plan Trust.

·                                          The Plan Secured Notes Alternative Payment may be issued by Dynegy, at its sole option, in lieu of issuing the Plan Secured Notes, and shall be a Cash payment in an amount equal to the aggregate principal amount of the Plan Secured Notes that would have been issued, after applicable adjustments pursuant to Section 12.3 of the Plan.

·                                          The Plan Preferred Stock will be Redeemable Convertible Preferred Shares, par value $0.01 per share, issued by Dynegy and will accrue dividends, commencing on November 7, 2011, at an annual rate of 4% through December 31, 2013, 8% from January 1, 2014 through December 31, 2014, and 12% thereafter, compounding as set forth in the “Designation of the Preferred Stock” attached to the Plan as Exhibit “D” (the “Stock Designation”).  Dividends will not be paid in cash, but will accrue.  The Plan Preferred Stock will not be convertible at the option of the holder; but, based upon the capital structure of Dynegy anticipated to be in effect as of the Effective Date, the Plan Preferred Stock shall be convertible into 97% of Dynegy’s fully-diluted common stock on the terms set forth in the Stock Designation.  The Plan Preferred Stock may be redeemed by Dynegy, subject to certain limitations, as set forth in the Stock Designation, at an aggregate price (assuming redemption of all Plan Preferred Stock outstanding as of the Effective Date) equal to: $1.95 billion if redeemed prior to May 8, 2013; $2.0 billion if redeemed between May 8, 2013 and December 31, 2013; and $2.1 billion if redeemed between January 1, 2014 and the mandatory conversion date (December 31, 2015), in each case, plus accrued and unpaid dividends.  The Plan Preferred Stock will have no voting or governance rights except that, following the occurrence of a Trigger Event, the Plan Preferred Stock will vote, on an “as converted” basis together with the holders of the Common Stock (as defined below), and subject to the receipt of any required regulatory approvals, on all matters submitted to stockholders. In addition, after the Effective Date, the approval of holders of Plan Preferred Stock will be required for certain actions by Dynegy, as described in more detail in the Stock Designation.

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·                                          The Subordination Alternative Election:

·                                          The subordination provisions of the Subordinated Notes Indenture shall be enforceable against holders of Allowed Subordinated Notes Claims.  As such, Allowed Subordinated Notes Claims shall be subordinated to Allowed Senior Notes Claims with respect to the right to receive Plan Distributions and all Plan Distributions on account of Allowed Subordinated Notes Claims shall be automatically distributed to holders of Allowed Senior Notes Claims without any further action or demand and shall be shared pro rata only among holders of Allowed Senior Notes Claims.  However, a holder of an Allowed Subordinated Notes Claim may elect, in the alternative, to reduce the amount of its Allowed Subordinated Notes Claim to 25% of the Allowed face amount of such Claim, and receive its Pro Rata Share of the Plan Distributions under Class 3 — General Unsecured Claims, without subordination, based on the reduced amount of its Allowed Subordinated Notes Claim.

B.                                    Summary of Treatment Under the Plan

The following chart summarizes the treatment of each class of Claims against and Equity Interests in DH under the Plan:

CLAIMS AND EQUITY INTERESTS NOT CLASSIFIED UNDER THE PLAN

(3)                                  Administrative Claims and Priority Tax Claims are treated in accordance with sections 1129(a)(9)(A) and 1129(a)(9)(C) of the Bankruptcy Code, respectively.  Such Claims are not designated as classes of Claims for the purposes of the Plan or for the purposes of sections 1123, 1124, 1125, 1126 or 1129 of the Bankruptcy Code.

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CLAIMS AND EQUITY INTERESTS CLASSIFIED UNDER THE PLAN

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VI.

GENERAL INFORMATION

The discussion below briefly describes DH, as well as the other Debtors, and certain of their non-Debtor subsidiaries and affiliates (together with Dynegy, collectively, the “Company”) and their businesses as they exist as of the date of this Disclosure Statement.  Please note that while all of the Debtors filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code and their cases are being jointly administered under Case No. 11-38111 (CGM), the Plan only addresses the Claims against and Equity Interests in DH.

A.                                    Overview of the Company

Dynegy and DH are holding companies and conduct substantially all of their business operations through their subsidiaries.  Their primary business is the production and sale of electric energy, capacity and ancillary services from their fleet of sixteen operating power plants in six states totaling approximately 11,600 megawatts of generating capacity.  The organizational chart below illustrates the structure of the Company as of the date of this Disclosure Statement.  Please note that this organizational chart does not show all legal entities in the corporate structure.

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B.                                    Overview of the Company’s Business

The operating subsidiaries of Dynegy and DH sell electric energy, capacity and ancillary services on a wholesale basis from their power generation facilities.  The capacity of a power generation facility is its electricity production capability, measured in megawatts (“MW”).  The capacity is used to produce electric energy, which is measured in megawatt hours.  Wholesale electricity customers will, for reliability reasons and to meet regulatory requirements, contract for rights to capacity from generating units.  Ancillary services are the products of a power generation facility that support the transmission grid operation, follow real-time changes in load, and provide emergency reserves for major changes to the balance of generation and load.

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The operating subsidiaries of Dynegy and DH sell these products individually or in combination to customers under short-, medium- and long-term contractual agreements or tariffs.  These customers include regional transmission organizations and independent system operators, integrated utilities, municipalities, electric cooperatives, transmission and distribution utilities, industrial customers, power marketers, financial participants such as banks and hedge funds, other power generators, and commercial end-users.  All products are sold on a wholesale basis for various lengths of time from hourly to multi-year transactions.  Some customers, such as municipalities or integrated utilities, purchase products for resale in order to serve their retail, commercial and industrial customers.  Other customers, such as some power marketers, may buy products and related services to serve their own wholesale or retail customers or as a hedge against power sales they have made.

C.                                    Overview of the Debtors’ Businesses

DH is a holding company that conducts its business operations through its direct and indirect subsidiaries, including the other Debtors.  The primary business of DH and its operating subsidiaries is the production and sale of electric energy, capacity and ancillary services from a fleet of 10 operating power plants in six states totaling approximately 9,903 MW of generating capacity.  The other Debtors’ direct operations consist of only two of these plants — at Dynegy Danskammer and Dynegy Roseton — which have a combined generating capacity of 1,693 MW.

DH and the other Debtors rely on certain non-Debtor subsidiaries of DH for essential functions.  For example, Dynegy Administrative Services Company, a Delaware corporation, generally manages the segregated cash management systems for DH and its subsidiaries.  Dynegy Power Marketing, LLC, a Texas limited liability company (“DPM”), performs various functions, including marketing power and capacity, coordinating the power output of the various generation facilities, and providing fuel management services.  The Debtors also have service agreements with other non-Debtor affiliates, under which the Debtors provide compensation to such affiliates for their services.

As noted above, while all of the Debtors filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code and their cases are being jointly administered under Case No. 11-38111(CGM) solely for procedural purposes, the Plan only addresses the claims against and equity interests in DH.  The following is a description of each of DH and the other Debtors.

1.                                      Dynegy Holdings, LLC

DH began operations as Natural Gas Clearinghouse (“Clearinghouse”) in 1985.  From the inception of its operations until 1990, Clearinghouse’s activities related primarily to natural gas marketing.  Starting in 1990, Clearinghouse began expanding its core business operations through acquisitions and strategic alliances resulting in the formation of a midstream energy asset business, and it established energy marketing operations in both Canada and the United Kingdom.  In 1994, Clearinghouse initiated electric power marketing operations in order to take advantage of opportunities created by the deregulation of the domestic electric power industry, and in March 1995, Clearinghouse merged with Trident NGL Holding, Inc., a fully integrated natural gas liquids company, with the surviving entity named NGC Corporation (“NGC”).  Approximately one year later, NGC completed a strategic combination with Chevron U.S.A. Inc.

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and certain of its affiliates (collectively, “Chevron”) whereby substantially all of Chevron’s midstream assets merged with NGC.  In 1998, NGC changed its name to Dynegy Inc. to reflect its evolution from a natural gas marketing company to an energy services company capable of meeting the growing demands and diverse challenges of the dynamic energy market of the 21st century.  In early 2000, Dynegy Inc. acquired Illinova Corporation, and as part of this acquisition, Dynegy Inc. changed its name to Dynegy Holdings Inc. and became a wholly-owned subsidiary of a new holding company, now referred to as Dynegy Inc.  On September 1, 2011, DH changed its corporate form from a Delaware corporation to a Delaware limited liability company pursuant to the General Corporation Law of the State of Delaware (the “DGCL”).

As further described above, DH is a holding company that conducts its business operations through its direct and indirect subsidiaries, including the other Debtors.  The primary business of DH and its operating subsidiaries is the production and sale of electric energy, capacity and ancillary services from a fleet of 10 operating power plants in six states totaling approximately 9,903 MW of generating capacity.

2.                                      Dynegy Northeast Generation, Inc.

DNE is a Delaware corporation and wholly-owned subsidiary of DH that holds 100% of the equity interests in Hudson Power, L.L.C. and provides administrative support and employs personnel for the operation of the Danskammer and Roseton power generation facilities.

3.                                      Hudson Power, L.L.C.

Hudson Power, L.L.C. (“Hudson Power”) is a Delaware limited liability company that has no operations and holds 100% of the equity interests in Dynegy Danskammer and Dynegy Roseton.

4.                                      Dynegy Danskammer, L.L.C.

Dynegy Danskammer, L.L.C. (“Dynegy Danskammer”), a Delaware limited liability company, owns the 185-acre site in Newburgh, New York on which the Danskammer power generation facility is located, adjacent to the Roseton site.  There are six (6) units at Dynegy Danskammer’s power generation facility — four of which are owned by Dynegy Danskammer, and two of which are leased by Dynegy Danskammer from Danskammer OL LLC (the “Danskammer Owner Lessor”), an indirect subsidiary of Public Service Enterprise Group, Inc. (“PSEG”), an unaffiliated entity.  A further description of Dynegy Danskammer’s operations is set forth below.

5.                                      Dynegy Roseton, L.L.C.

Dynegy Roseton, L.L.C. (“Dynegy Roseton”), a Delaware limited liability company, owns the 195-acre site in Newburgh, New York, on which the Roseton power generation facility is located, adjacent to the Danskammer site.  Dynegy Roseton operates the two (2) units at the power generation facility.  It leases these units from Roseton OL LLC (the “Roseton Owner Lessor” and together with the Danskammer Owner Lessor, the “Owner Lessors”), an indirect subsidiary of PSEG.  A further description of Dynegy Roseton’s operations is set forth below.

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D.                                    Operations of Dynegy Danskammer and Dynegy Roseton

Dynegy Danskammer owns units 1, 2, 5, and 6 at the Danskammer power generation facility.  Units 1 and 2 are “peakers” (power plants that generally run only during periods of peak demand for electricity) with a net capacity of 129.7 MW.  They use natural gas and fuel oil as their primary fuels.  Units 5 and 6 are emergency diesel generators with net capacities of 2.5 MW each and currently are not in operation and are not connected to the power grid.  Dynegy Danskammer leases units 3 and 4 (collectively, the “Danskammer Facility”) from the Danskammer Owner Lessor; these units are “baseload” power plants (power plants that generally run at all times, providing the amount of electricity generally needed to meet customer demand) with a net capacity of 373.4 MW.  They use coal and natural gas as their primary fuels.

Dynegy Roseton leases both units at the Roseton power generation facility (collectively, the “Roseton Facility” and together with the Danskammer Facility, the “Leased Facilities”) from the Roseton Owner Lessor; these units are “peakers” with a net capacity of 1,200 MW.  They use natural gas and fuel oil as their primary fuels.

The Leased Facilities are connected to the Northeast Power Coordinating Council, one of the 10 regional reliability councils that form the North American Electric Reliability Council.  They compete primarily in the New York wholesale market, operated and maintained by the New York Independent System Operator (the “NYISO”), although the power generated at the Danskammer and Roseton facilities may be sold into the Pennsylvania/New Jersey/Maryland Power Pool, as well as to New England, Quebec, and Ontario.

The operations of Dynegy Danskammer and Dynegy Roseton are subject to extensive federal, state, and local statutes, rules and regulations, including the Federal Power Act (the “FPA”), the Comprehensive Environmental Response, Compensation and Liability Act, the Superfund Amendments and Reauthorization Act, the Resource Conservation and Recovery Act, and the Occupational Safety and Health Act.  Their regulators include the Federal Energy Regulatory Commission (“FERC”), the New York Public Service Commission (the “NYPSC”), and the Environmental Protection Agency (the “EPA”).

Dynegy Danskammer and Dynegy Roseton have no employees; the workers at the facility are employed by DNE.(4)  Their major liabilities consist of semiannual rent payments to the Owner Lessors under the Lease Documents (defined below).  In addition to the land on which the Roseton and Danskammer power plants are located and the power plant units or leasehold interests therein, as applicable, their assets consist of various capital spare parts, emissions credits, emissions control and monitoring equipment, fuel inventory, fuel supply equipment, communications equipment and licenses, vehicles, a locomotive, administrative buildings, and similar items.  Substantially all of Dynegy Danskammer’s and Dynegy Roseton’s revenues are derived from sales to the NYISO through DPM, a non-Debtor affiliate.  Due to NYISO regulations, DPM, rather than one of the Debtors, is a party to energy supply contracts with the NYISO.  Because none of the Debtors are currently authorized NYISO market

(4)                                  One employee, the Managing Director of Plant operations at the Danksammer and Roseton facilities is employed by Dynegy Operating Company, a non-Debtor Affiliate.

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participants/customers,(5) DPM, an energy marketer that is a registered NYISO customer and market participant and is authorized to sell energy, capacity and certain ancillary services at market-based rates, provides energy management services to Dynegy Roseton and Dynegy Danskammer.  Among other things, DPM sells the energy generated by the Leased Facilities into the NYISO markets.

The Debtors’ obligations under the Danskammer Lease Documents and the Roseton Lease Documents (together, the “Lease Documents”) are significantly burdensome, do not provide economic value to the Debtors’ estates, and will impair the Debtors’ ability to reorganize absent rejection.  Accordingly, the Debtors have determined that the rejection of the Lease Documents is an appropriate exercise of their business judgment.  On the Petition Date, the Debtors filed a Motion Pursuant to Section 365 of the Bankruptcy Code and Bankruptcy Rule 6006 for Entry of an Order Authorizing the Debtors to Reject the Lease Documents (the “Motion to Reject”) [Docket No. 5].  Further information concerning the Motion to Reject is contained in this Disclosure Statement in the article entitled “The Reorganization Cases.”

E.                                      Events Leading to the Need for Restructuring

A combination of dwindling liquidity due to declining revenues (resulting from lower prices over the past two years) and unprofitable leases at the Roseton Facility and Danskammer Facility have adversely impacted the Company’s financial performance.  Overall, sustained low power prices over the past two years have had a significant adverse impact on the Debtors’ business and continue to negatively impact their projected future liquidity.  Specifically, DH’s annual consolidated revenue peaked in the year ending December 31, 2008 at $3.324 billion, and has since declined to $2.468 billion in the year ending December 31, 2009 and $2.323 billion in the year ending December 31, 2010.  As further illustration of the steep decline in revenue, for the nine month period ending September 30, 2010, DH reported consolidated revenues of $1.872 billion, and for the nine month period ending September 30, 2011, DH reported consolidated revenues of $1.347 billion.

In an attempt to address these issues, Dynegy and its subsidiaries implemented a number of cost-cutting initiatives, including, among other things, in February 2011, eliminating approximately 135 positions across all functional and geographic areas, resulting in an expected annual savings of approximately $50 million.  While helpful, the cost-cutting initiatives were not enough, and as DH’s ratio of secured debt to EBITDA increased, its ability to draw on the revolving credit facility under the Credit Agreement (as defined below) became more problematic.  Further strain on DH’s liquidity came in March as S&P downgraded DH to “CC” and placed it on CreditWatch with negative implications.  Similarly, on March 28, 2011, Moody’s downgraded DH from “Caa1” to “Caa3”, representing Moody’s fourth downgrade of DH since the beginning of 2009 (when it was rated “B1”).  These downgrades caused various counterparties to demand additional collateral in support of certain of the Debtors’ operational agreements.  The Company uses a significant portion of its capital resources in the form of cash,

(5)                                  Each of Dynegy Roseton and Dynegy Danskammer filed new customer applications that are currently pending with NYISO. No action is expected with respect to these applications until after December 1, 2011, although it is unclear what impact the bankruptcy proceedings and rejection of the Danskammer Lease Documents and the Roseton Lease Documents will have on such applications.

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short-term investments and letters of credit to satisfy counterparty collateral demands.  These counterparty collateral demands reflect the Company’s non-investment grade credit ratings and counterparties’ views of DH’s and its subsidiaries’ financial condition and ability to satisfy their performance obligations, as well as commodity prices and other factors.

F.                                      Prepetition Restructurings

To, among other things, maximize their flexibility to address leverage and liquidity issues and to preserve the value of their assets, Dynegy, DH, and certain of their direct and indirect subsidiaries implemented the Prepetition Restructurings on August 4, 2011.  As part of the Prepetition Restructurings, Dynegy and certain of its direct and indirect subsidiaries completed an internal reorganization to eliminate the regional organizational structure and create separate coal-fired power generation and gas-fueled power generation units whereby (i) substantially all of Dynegy’s indirect wholly-owned coal-fired power generation facilities remained with Dynegy Midwest Generation, LLC (“Dynegy CoalCo”), (ii) substantially all of Dynegy’s indirect wholly-owned natural gas-fueled power generation facilities were transferred to Dynegy Power, LLC (“Dynegy GasCo”), and (iii) all of Dynegy’s indirect ownership interests in DNE, the entity that indirectly holds the equity interests in Dynegy Roseton and Dynegy Danskammer, were transferred to DH.  Following such reorganization, Dynegy’s operations were reorganized into three segments:  a gas segment, a coal segment and an “other” segment consisting of the remaining assets, including primarily DNE and the leasehold interests in the facilities owned by Dynegy Roseton and Dynegy Danskammer.

One of the primary goals of the Prepetition Restructurings was to facilitate obtaining new financing for Dynegy GasCo and Dynegy CoalCo at a lower cost than otherwise would have been available but for the Prepetition Restructurings.  Among other things, Dynegy GasCo and Dynegy CoalCo were therefore designed to be separately financeable and bankruptcy remote.  This resulted in the credit rating agencies assigning a better credit rating to Dynegy GasCo and, consequently, a lower cost of raising capital to fund the entities’ operations.  On August 5, 2011, Dynegy GasCo and its parent Dynegy Gas Investments Holdings, LLC, each a non-Debtor subsidiary of DH, entered into a $1.1 billion, five-year senior secured term loan facility (as further described below, the “GasCo Credit Facility”).  The same day, Dynegy CoalCo and its parent Dynegy Coal Investments Holdings, LLC, each a non-Debtor subsidiary of DH, entered into a $600 million, five-year senior secured term loan facility (as further described below, the “CoalCo Credit Facility” and together with the GasCo Credit Facility, the “New Credit Facilities”).  Proceeds from these New Credit Facilities were used, among other things, to (a) repay an intercompany obligation of a Dynegy GasCo subsidiary to DH, which ultimately enabled DH to repay its outstanding indebtedness under DH’s existing senior secured credit agreement (the “Credit Agreement”), and (b) fund additional cash to the balance sheets of Dynegy GasCo and Dynegy CoalCo to be used for general working capital and general corporate purposes.

On September 1, 2011, Dynegy and DGIN entered into a Membership Interest Purchase Agreement whereby DGIN sold 100% of the outstanding membership interests of Dynegy Coal Holdco, LLC, a Delaware limited liability company and wholly owned subsidiary of DGIN, to Dynegy.  In exchange for Dynegy Coal Holdco, LLC, Dynegy issued an undertaking to make certain specified payments over time which coincide in timing and amount to the payments of

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principal and interest that DH is obligated to make under a portion of certain of its Senior Notes (the “Undertaking Agreement”).  The Undertaking Agreement does not provide any rights or obligations with respect to any outstanding DH notes or debentures, including the notes and debentures due in 2019 and 2026.

DGIN assigned its right to receive payments under the Undertaking Agreement to DH in exchange for a promissory note (the “DH Note”) in the amount of $1.25 billion that matures in 2027 (the “Assignment”).  The DH Note bears annual interest at a rate of 4.24%, which will be payable upon maturity.  As a condition to Dynegy’s consent to the Assignment, the Undertaking Agreement was amended and restated to be between DH and Dynegy and to provide for the reduction of Dynegy’s obligations if the outstanding principal amount of the Senior Notes decreased as a result of any exchange offer, tender offer or other purchase or repayment by Dynegy or its subsidiaries (other than DH and its subsidiaries, unless Dynegy guarantees the debt securities of DH or such subsidiary in connection with such exchange offer, tender offer or other purchase or repayment); provided that such principal amount is retired, cancelled or otherwise forgiven.(6)

By undertaking these corporate and financial restructuring steps in 2011, DH and its Debtor and non-Debtor affiliated entities were able to avoid defaults under their then-current financing arrangements, obtain additional liquidity and flexibility and refinance the obligations outstanding under the Credit Agreement.

G.                                    Restructuring Support Agreement

Prior to the Petition Date, Dynegy and DH engaged in extensive discussions related to a potential consensual restructuring with certain holders of DH’s outstanding public bond debt.  After several weeks of active arm’s-length negotiations, DH and Dynegy, in consultation with their advisors, reached an agreement with the Consenting Noteholders regarding a framework for a potential consensual restructuring of over $4.0 billion of obligations owed by DH.  The principal terms of the pre-arranged restructuring plan (the “Restructuring”) are evidenced by the Restructuring Support Agreement dated November 7, 2011 among Dynegy, DH and the Consenting Noteholders (the “Noteholder Restructuring Support Agreement”) and the restructuring term sheet attached thereto.  Copies of the Noteholder Restructuring Support Agreement and Restructuring Term Sheet were attached as exhibits to the Declaration of Kent R. Stephenson Pursuant to Local Bankruptcy Rule 1007-2 in Support of First Day Motions filed on November 8, 2011 [Docket No. 18].

Pursuant to the Noteholder Restructuring Support Agreement, the Consenting Noteholders agreed, among other things, subject to the terms and conditions contained in the

(6)                                  In addition to the Prepetition Restructurings described above, in September 2011, Dynegy and DH commenced an exchange offer pursuant to which Dynegy offered to pay a combination of cash and its own new 10% Senior Secured Notes due 2018 (the “Exchange Notes”) in exchange for the tender of up to $1.25 billion of Prepetition Notes (the “Exchange Offer”).  The total consideration ranged from $400 to $720 per $1,000 principal amount of Prepetition Notes, and the exact combination of cash and Exchange Notes varied, depending on the series of Prepetition Notes being exchanged and the date of tender.  The Exchange Offer, after being extended several times, was terminated on November 3, 2011.  Holders of an insufficient amount of Prepetition Notes tendered their notes, and the Exchange Offer was not consummated.

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Noteholder Restructuring Support Agreement, to (i) vote their claims under the Senior Notes in favor of the Restructuring and not revoke such vote, (ii) not object to the Restructuring, (iii) not initiate legal proceedings inconsistent with or that would prevent, frustrate or delay the Restructuring, (iv) not solicit, support, formulate, entertain, encourage or engage in discussions or negotiations, or enter into any agreements relating to, any alternative restructuring, and (v) not solicit, encourage, or direct any person or entity, including the indenture trustee under the indenture for the Senior Notes, to undertake any such action.

The Noteholder Restructuring Support Agreement provides that it may be terminated if (among other things): (i) a chapter 11 plan and other documents required to implement the Restructuring are not, with respect to any economic or other material term of the Restructuring, in form and substance acceptable to Dynegy, DH and a majority of the Consenting Noteholders, filed by December 7, 2011 (subject to the right of individual Consenting Noteholders to terminate the Noteholder Restructuring Support Agreement as to themselves in the event such documents are not acceptable with respect to any economic or other material term by December 7, 2011), (ii) the Bankruptcy Court has not entered an order approving the disclosure statement related to the plan by March 15, 2012, (iii) the Bankruptcy Court has not entered an order confirming the plan by June 15, 2012, (iv) the plan has not become effective by August 1, 2012, (iv) a trustee, receiver, examiner with expanded powers, responsible person or responsible officer is appointed in the Chapter 11 Cases, or (v) any court of competent jurisdiction or other competent governmental or regulatory authority issues an order making it illegal or otherwise restricting, preventing or prohibiting the Restructuring in a manner that cannot reasonably be remedied by Dynegy, DH, the Company or the Consenting Noteholders.

H.                                    Prepetition Indebtedness and Lease Obligations

1.                                      New Credit Facilities

a.                                       GasCo Credit Facility

As part of the Prepetition Restructurings described above, on August 5, 2011, Dynegy GasCo and DGIN entered into the GasCo Credit Facility.  The GasCo Credit Facility is a five-year senior secured term loan facility with an aggregate principal amount of $1.1 billion.  Amounts borrowed under the GasCo Credit Facility that are repaid or prepaid may not be re-borrowed.  The GasCo Credit Facility will mature on August 5, 2016 and will amortize in equal quarterly installments in aggregate annual amounts equal to 1.00 percent of the original principal amount of the GasCo Credit Facility with the balance payable on the fifth anniversary of the closing date.

All obligations of Dynegy GasCo under (i) the GasCo Credit Facility (the “GasCo Borrower Obligations”) and (ii) at the election of Dynegy GasCo, (a) cash management arrangements and (b) interest rate protection, commodity trading or hedging or other permitted hedging or swap arrangements (the “Hedging/Cash Management Arrangements”) are unconditionally guaranteed jointly and severally on a senior secured basis (the “GasCo Guarantees”) by each existing and subsequently acquired or organized direct or indirect material domestic subsidiary of Dynegy GasCo (the “GasCo Guarantors “), in each case, as otherwise permitted by applicable law, regulation and contractual provision and to the extent such

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guarantee would not result in adverse tax consequences as reasonably determined by Dynegy GasCo.  None of Dynegy GasCo’s parent companies is obligated to repay the GasCo Borrower Obligations.

The GasCo Borrower Obligations, the GasCo Guarantees and any Hedging/Cash Management Arrangements are secured by first priority liens on and security interests in 100 percent of the capital stock of Dynegy GasCo (as discussed below) and substantially all of the present and after-acquired assets of Dynegy GasCo and each GasCo Guarantor (collectively, the “GasCo Collateral”).  Accordingly, such assets are only available for the creditors of Dynegy Gas Investments Holdings, LLC and its subsidiaries.

The GasCo Credit Facility bears interest, at Dynegy GasCo’s option, at either (i) 7.75% per annum plus LIBOR, subject to a LIBOR floor of 1.50% with respect to any Eurodollar Term Loan or (ii) 6.75% per annum plus the Alternate Base Rate with respect to any ABR Term Loan.  Dynegy GasCo may elect from time to time to convert all or a portion of the Term Loan from any ABR Borrowing into a Eurodollar Borrowing or vice versa.  With certain exceptions, the GasCo Credit Facility is non-callable for the first two years and is subject to a prepayment premium.  The GasCo Credit Facility contains certain mandatory prepayment provisions.  The GasCo Credit Facility also contains customary events of default and affirmative and negative covenants including, subject to certain specified exceptions, limitations on amendments to constitutive documents, liens, capital expenditures, acquisitions, subsidiaries and joint ventures, investments, the incurrence of debt, fundamental changes, asset sales, sale-leaseback transactions, hedging arrangements, restricted payments, changes in nature of business, transactions with affiliates, burdensome agreements, amendments of debt and other material agreements, accounting changes, prepayment of indebtedness or repurchases of equity interests and change of control.

The GasCo Credit Facility permits distributions of up to $135 million per year provided the distributing entity has, as of the date of the distribution, at least $50 million of liquidity and no default or event of default has occurred and is continuing or would result from such distribution.

b.                                      CoalCo Credit Facility

As part of the Prepetition Restructurings described above, on August 5, 2011, Dynegy CoalCo and Dynegy Coal Investments Holdings, LLC entered into the CoalCo Credit Facility.  The CoalCo Credit Facility is a senior secured term loan facility with an aggregate principal amount of $600 million.  Amounts borrowed under the CoalCo Credit Facility that are repaid or prepaid may not be re-borrowed.  The CoalCo Credit Facility will mature on August 5, 2016 and will amortize in equal quarterly installments in aggregate annual amounts equal to 1.00 percent of the original principal amount of the CoalCo Credit Facility with the balance payable on the fifth anniversary of the closing date.

All obligations of Dynegy CoalCo under (i) the CoalCo Credit Facility (the “CoalCo Borrower Obligations”) and (ii) at the election of Dynegy CoalCo, Hedging/Cash Management Arrangements are unconditionally guaranteed jointly and severally on a senior secured basis (the “CoalCo Guarantees”) by each existing and subsequently acquired or organized direct or indirect

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material domestic subsidiary of Dynegy CoalCo (the “CoalCo Guarantors”), in each case, as otherwise permitted by applicable law, regulation and contractual provision and to the extent such guarantee would not result in adverse tax consequences as reasonably determined by Dynegy CoalCo.  None of Dynegy CoalCo’s immediate or ultimate parent companies is obligated to repay the CoalCo Borrower Obligations.  The CoalCo Borrower Obligations, the CoalCo Guarantees and any Hedging/Cash Management Arrangements are secured by first priority liens on and security interests in 100 percent of the capital stock of Dynegy CoalCo and substantially all of the present and after-acquired assets of Dynegy CoalCo and each CoalCo Guarantor.  Accordingly, such assets are only available for the creditors of Dynegy CoalCo Investments Holdings, LLC and its subsidiaries.

The CoalCo Credit Facility bears interest, at Dynegy CoalCo’s option, at either (i) 7.75% per annum plus LIBOR, subject to a LIBOR floor of 1.50% with respect to any Eurodollar Term Loan or (ii) 6.75% per annum plus the Alternate Base Rate with respect to any ABR Term Loan.  Dynegy CoalCo may elect from time to time to convert all or a portion of the Term Loan from any ABR Borrowing into a Eurodollar Borrowing or vice versa.  With certain exceptions, the CoalCo Credit Facility is non-callable for the first two years and is subject to a prepayment premium.  The CoalCo Credit Facility contains certain mandatory prepayment provisions.  The CoalCo Credit Facility also contains customary events of default and affirmative and negative covenants including, subject to certain specified exceptions, limitations on amendments to constitutive documents, liens, capital expenditures, acquisitions, subsidiaries and joint ventures, investments, the incurrence of debt, fundamental changes, asset sales, sale-leaseback transactions, hedging arrangements, restricted payments, changes in nature of business, transactions with affiliates, burdensome agreements, amendments of debt and other material agreements, accounting changes, prepayment of indebtedness or repurchases of equity interests and change of control (which would be triggered upon an exercise of the pledge of the membership interests of Dynegy Coal Holdco, LLC).

The CoalCo Credit Facility limits distributions to $90 million per year provided the distributing entity has, as of the date of the distribution, at least $50 million of liquidity and no default or event of default has occurred and is continuing or would result from such distribution.

2.                                      DH Note

As further described below, on September 1, 2011, DH issued the DH Note in the principal amount of $1.25 billion to DGIN in exchange for the transfer by DGIN to DH of DGIN’s rights to receive the payment stream from Dynegy pursuant to the Undertaking Agreement.  The DH Note bears annual interest at a rate of 4.24%, payable upon the maturity date, September 1, 2027.

3.                                      Cash Collateralized Letter of Credit Facility

On August 5, 2011, DH and Credit Suisse AG, Cayman Islands Branch (“Credit Suisse Cayman”), entered into a Letter of Credit Reimbursement and Collateral Agreement, dated as of August 5, 2011 (the “Letter of Credit Agreement”), for a $26,217,318 cash collateralized Letter of Credit Facility under which Credit Suisse Cayman would maintain five then-existing letters of credit (one of which expired on October 28, 2011) (the “Letter of Credit Facility”).  The letters

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of credit under the Letter of Credit Facility are issued (i) to various New York state regulatory agencies for certain environmental liabilities related to Dynegy Danskammer and (ii) to backstop certain obligations under the Debtors’ workers compensation insurance programs, as well as various surety bonds posted in connection with litigation matters.  The Letter of Credit Facility is collateralized by an account maintained by Bank of New York Mellon holding the sum of $27,003,837.54, which amount may be withdrawn only in accordance with the Letter of Credit Agreement.

4.                                      Credit Agreement

On April 2, 2007, DH, Dynegy (as guarantor), and certain of their direct and indirect subsidiaries (as guarantors) entered into a Fifth Amended and Restated Credit Agreement.  Under the Credit Agreement, DH had access to a $1.15 billion revolving credit facility, an $850 million term letter of credit facility, and a $70 million senior secured term loan facility.  The obligations under the Credit Agreement were secured by substantially all of the assets of DH.  The obligations under the Credit Agreement were guaranteed by Dynegy and by certain of its direct and indirect subsidiaries, and secured by substantially all of the assets of the guarantors.  As set forth above, DH repaid all obligations under the Credit Agreement in August 2011.

5.                                      Unsecured Debt

DH is obligated under seven (7) different series of notes, debentures, and subordinated capital income securities in the outstanding aggregate principal amount of $3,570.3 million.

a.                                       Senior Unsecured Notes/Debentures

DH has, from time to time, issued various series of senior unsecured notes under the Indenture dated September 26, 1996, as amended and restated as of March 23, 1998, as amended and restated as of March 14, 2001, and under the First through Sixth Supplemental Indentures thereto, between DH and Wilmington Trust Company (as successor to JP Morgan Chase Bank, N.A., successor to Bank One Trust Company, National Association) (the “Senior Notes Indenture”).  The following series of notes issued under the Senior Notes Indenture are outstanding:

·                                          8.75% senior unsecured notes in the outstanding aggregate principal amount of $88.5 million, due February 15, 2012;

·                                          7.5% senior unsecured notes in the outstanding aggregate principal amount of $785 million, due June 1, 2015;

·                                          8.375% senior unsecured notes in the outstanding aggregate principal amount of $1,046.8 million, due May 1, 2016;

·                                          7.125% senior debentures in the outstanding aggregate principal amount of $175 million due May 15, 2018;

·                                          7.75% senior unsecured notes in the outstanding aggregate principal amount of $1,100 million, due June 1, 2019; and

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·                                          7.625% senior debentures in the outstanding aggregate principal amount of $175 million due October 15, 2026.

b.                                      Subordinated Debentures

DH is also obligated under those Series A 8.316% Subordinated Capital Income Securities (“SKIS”) that were issued in May 1997 by NGC Corporation Capital Trust I through a Rule 144a offering to qualified institutional buyers.  In September 1997, Series B 8.316% SKIS were exchanged for the outstanding Series A 8.316% SKIS.  The Series B 8.316% SKIS in the aggregate principal amount of $200 million due June 1, 2027 remain outstanding, and are an unsecured obligation of DH.

6.                                      Bilateral Contingent Letter of Credit Facility

On May 21, 2010, DH executed a $150 million unsecured bilateral contingent letter of credit facility with Morgan Stanley Capital Group Inc. to provide DH access to liquidity to support collateral posting requirements.  Availability under the facility is tied to increases in 2012 forward spark spreads and power prices.  The facility matures on December 31, 2012.  A facility fee accrues on the unutilized portion of the facility at an annual rate of 0.6% and letter of credit availability fees accrue at an annual rate of 7.25%.  There are currently no amounts available or outstanding under the facility.

7.                                      Lease Obligations

On or about May 8, 2001 (the “Closing Date”), Debtors Dynegy Roseton and Dynegy Danskammer (together, the “Debtor Lessees”) each entered into a sale-and-leaseback transaction pertaining to, respectively, the Roseton Facility and the Danksammer Facility.

On the Closing Date, the Owner Lessors purchased the Roseton Facility and the Danskammer Facility from Dynegy Roseton and Dynegy Danskammer, respectively, and, in each case, entered into contractual arrangements which gave them certain rights to use certain related common facilities located at the sites of the respective Leased Facilities.  The Owner Lessors are subsidiaries of Resource Capital Management Corporation (the “Equity Investor”), a third party investor and a wholly-owned subsidiary of PSEG Resources Inc. (which is an indirect subsidiary of PSEG, a company engaged in various aspects of the electric power business) (together with the Equity Investor, the Owner Lessors, Roseton OP LLC, as Owner Participant, and Danskammer OP LLC, as Owner Participant, the “PSEG Entities”).

The purchase price of the Danskammer Facility was approximately $300 million.  The purchase price of the Roseton Facility was approximately $620 million.  To fund their purchases of the respective Leased Facilities from Dynegy Danskammer and Dynegy Roseton, the Owner Lessors used $138 million in equity funding from certain of the PSEG Entities, and financed the remaining $800 million of the purchase price and the related transaction expenses through a private offering of pass-through trust certificates (the “Pass-Through Trust Certificates”), which were sold to qualified institutional buyers (the “Pass-Through Certificate Holders”).  The proceeds thereof were then used to purchase notes from the Owner Lessors (the “Lessor Notes”), which are held for the benefit of the Pass-Through Certificate Holders by U.S. Bank National Association, in its capacity as Successor Lease Indenture Trustee (the “Lease Indenture Trustee”)

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under the Indentures of Trust, Mortgage, Assignment of Leases and Rents and Security Agreement related to each Facility (the “Lease Indentures”).

Also on the Closing Date, each of the Owner Lessors simultaneously leased each Facility to the respective Debtor Lessee pursuant to the Danskammer Facility Lease and Roseton Facility Lease (collectively, the “Facility Leases”).  Absent early termination, the Danskammer Facility Lease expires on May 8, 2031, and the Roseton Facility Lease expires on February 8, 2035.

Under the Facility Leases, rent is paid in semi-annual payments.  These lease payments under the Facility Leases are used by the Owner Lessors to pay principal and interest on the Lessor Notes with excess amounts available for distribution to the Equity Investor.  The Lessor Notes are secured by, among other things, an assignment of the Facility Leases and a mortgage on the underlying Leased Facilities.  Payments made in respect of the Lessor Notes are distributed to the Pass-Through Certificate Holders under the terms of the Pass-Through Trust Agreement pursuant to which the Pass-Through Certificates were issued.

As of the Petition Date, the future lease payments are (i) $691,030,741.42 in the aggregate due from November 8, 2011 through the lease expiration for the Roseton Facility and (ii) $102,991,141.25 in the aggregate due from November 8, 2011 through the lease expiration for the Danskammer Facility.  DH has guaranteed the Debtor Lessees’ payment and performance obligations under their respective leases on a senior unsecured basis.  Dynegy Roseton and Dynegy Danskammer have no demand rights to purchase the Leased Facilities at the end of their respective lease terms.  However, under certain circumstances, Dynegy Roseton and Dynegy Danksammer have a right of first refusal and right of first offer on the Leased Facilities.

As the Lease Documents are significantly burdensome, provide no economic value to the Debtors’ estates and will impair the Debtors’ ability to reorganize absent rejection, the Debtors have determined that the rejection of the Lease Documents is an appropriate exercise of their business judgment.  Accordingly, on the Petition Date, the Debtors filed the Motion to Reject.  Further information concerning the Motion to Reject is contained in this Disclosure Statement in the article entitled “The Reorganization Cases.”

I.                                         The Debtors’ Employees

The Debtors employ approximately 152 full-time employees, of whom approximately 126 are represented by Local Union 320 of the International Brotherhood of Electrical Workers, AFL-CIO.  DNE and Local Union 320 are parties to a collective bargaining agreement, effective February 1, 2008 and expiring January 31, 2012, which covers the approximately 126 unionized employees.  DNE has informed Local Union 320 that it does not intend to renew this collective bargaining agreement upon its expiration on January 31, 2012.  The remaining employees are not represented by a union and are predominantly administrative and managerial employees.  All of these employees are employed in connection with the operation of the Danskammer and Roseton power generation facilities, and all but one are employees of DNE.(7)

(7)                                As noted above, one employee, the Managing Director of Plant Operations at the Danksammer and Roseton facilities is employed by Dynegy Operating Company, a non-Debtor Affiliate.

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J.                                      Dynegy’s Board of Directors(8)

The following individuals serve on the Board of Directors for Dynegy: (i) Thomas W. Elward; (ii) Michael J. Embler, (iii) Robert C. Flexon, (iv) E. Hunter Harrison, (v) Vincent J. Intrieri, (vi) Samuel Merksamer, and (vii) Felix Pardo.  Below is a brief biography of each of the individuals who serve on the Board of Directors.

Thomas W. Elward.  Mr. Elward served as President and Chief Operating Officer of CMS Enterprises from March 2003 to July 2008.  Mr. Elward previously served in various roles with CMS Generation, a subsidiary of CMS Enterprises, including President and Chief Operating Officer from March 2003 to July 2008; President and Chief Executive Officer from January 2002 to February 2003; Senior Vice President — Operations and Asset Management from July 1998 to December 2001; and Vice President — Operations from March 1990 to June 1998.  Prior to CMS Enterprises, he held roles of increasing responsibility at Consumers Power, advancing to the position of Plant Manager.  He has served as a Dynegy director since 2011.

Michael J. Embler.  Mr. Embler formerly served as the Chief Investment Officer of Franklin Mutual Advisers LLC, an asset management subsidiary of Franklin Resources, Inc. from 2005 to 2009.  Mr. Embler joined Franklin Mutual Advisers in 2001 and, prior to becoming Chief Investment Officer, served as head of its Distressed Investment Group.  From 1992 until 2001, he worked at Nomura Holdings America, where he served as Managing Director managing a team investing in a proprietary fund focused on distressed and other event-driven corporate investments.  Mr. Embler currently serves on the Board of Directors of CIT Group, Inc., AboveNet, Inc. and Corlears School.  He has served as a Dynegy director since 2011.

Robert C. Flexon.  Mr. Flexon serves as President and Chief Executive Officer.  Prior to joining the Company, he served as the Chief Financial Officer of UGI Corporation, a distributor and marketer of energy products and related services from February to June 2011.  He was the Chief Executive Officer of Foster Wheeler AG from June 2010 until October 2010 and the President and Chief Executive Officer of Foster Wheeler USA from November 2009 until May 2010.  Prior to joining Foster Wheeler, Mr. Flexon was Executive Vice President and Chief Financial Officer of NRG Energy, Inc. (“NRG Energy”) from February 2009 until November 2009.  He previously served as Executive Vice President and Chief Operating Officer of NRG Energy from March 2008 until February 2009 and as its Executive Vice President and Chief Financial Officer from 2004 to 2008.  Prior to joining NRG Energy, Mr. Flexon held various key executive positions with Hercules, Inc. and Atlantic Richfield Company.  Mr. Flexon served on the board of directors of Foster Wheeler from 2006 until 2009 and from May 2010 until October 2010.  He has served as a Dynegy director since 2011.

E. Hunter Harrison.  Mr. Harrison served as interim President and Chief Executive Officer of Dynegy from April 2011 until June 2011.  He served as the President and Chief

(8)                                  Information regarding the Board and Officers set forth herein is limited to Dynegy because, as discussed herein and in the Plan, DH will be merged into Legacy DH, with Legacy DH as the surviving entity; the equity interests in Legacy DH will be transferred to the Plan Trust which will be administered by the Plan Trust Administrator.  Prior to such transfer, substantially all the assets of Legacy DH will be transferred to New DH.  The disclosure herein is made in accordance with section 1129(a)(5) of the Bankruptcy Code.

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Executive Officer of Canadian National Railway Company from January 2003 until December 2009 and as its Chief Operating Officer from 1998 until 2003.  Prior to joining Canadian National Railway, Mr. Harrison was the President and Chief Executive Officer of Illinois Central Railroad from 1993 until February 1998 and its Chief Operating Officer from 1989 to 1993.  Mr. Harrison served on the Board of Directors of Canadian National Railway from December 1999 until December 2009.  Mr. Harrison also served on the boards of The American Association of Railroads, The Belt Railway of Chicago, Terminal Railway, Wabash National Corporation, Illinois Central Railroad and TTX Company.  Mr. Harrison has served as a Dynegy director since March 2011.  He was named Chairman of the Board in June 2011.

Vincent J. Intrieri.  Mr. Intrieri has been a Senior Managing Director of Icahn Capital LP since November 2004.  Since January 2005, Mr. Intrieri has been Senior Managing Director of Icahn Associates Corp. and High River Limited Partnership.  Mr. Intrieri has been a director since July 2006 of Icahn Enterprises G.P. Inc.  From April 2005 through September 2008, Mr. Intrieri was the President and Chief Executive Officer of Philip Services Corporation.  Since December 2007, Mr. Intrieri has been the Chairman of the Board and a director of PSC Metal, Inc.  From August 2005 to June 2011, Mr. Intrieri served as a director of American Railcar Industries, Inc. (“ARI”).  From March 2005 to December 2005, Mr. Intrieri was a Senior Vice President, Treasurer and Secretary of ARI.  From April 2003 to June 2011, Mr. Intrieri served as Chairman of the Board and a director of Viskase Companies, Inc.  From November 2006 to November 2008, Mr. Intrieri served on the Board of Lear Corporation.  From August 2008 to September 2009, Mr. Intrieri was a director of WCI Communities, Inc.  Mr. Intrieri also serves on the boards of the following companies: National Energy Group, Inc., XO Holdings, Inc., WestPoint International Inc. and Federal-Mogul Corporation.  With respect to each company mentioned above, Carl C. Icahn, directly or indirectly, either (i) controls such company or (ii) has an interest in such company through the ownership of securities.  Mr. Intrieri was a certified public accountant.  He has served as a Dynegy director since 2011.

Samuel Merksamer.  Mr. Merksamer has served as an investment analyst at Icahn Capital LP, a subsidiary of Icahn Enterprises L.P., since May 2008.  Mr. Merksamer is responsible for identifying, analyzing and monitoring investment opportunities and portfolio companies for Icahn Capital.  Mr. Merksamer serves as a director of Viskase Companies, Inc., PSC Metals Inc. and Federal-Mogul Corporation.  Viskase Companies, PSC Metals and Federal-Mogul are each, directly or indirectly, controlled by Carl C. Icahn.  From 2003 until 2008, Mr. Merksamer was an analyst at Airlie Opportunity Capital Management, a hedge fund management company, where he focused on high yield and distressed investments.  He has served as a Dynegy director since 2011.

Felix Pardo.  Mr. Pardo served as the Chairman and Chief Executive Officer of Dyckerhoff, Inc., a major U.S. producer of cement, and as the Chairman of its subsidiaries, Lonestar Industries, Inc. and Glens Falls Cement Co., Inc., from July 1998 until his retirement in December 2002.  Prior to joining Dyckerhoff, Mr. Pardo was President and Chief Executive Officer of Ruhr American Coal Corporation from 1992 to 1998, Chairman of Newalta Corporation, a leading Canadian industrial waste management and environmental services company, from 1991 to 1998, and Chief Executive Officer of Newalta during its restructuring in 1991.  Mr. Pardo also served as Executive Vice President of Quorum Funding, a Canadian venture capital firm, during 1991 and 1992.  He was President and Chief Executive Officer of

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Philip Services, Inc., a waste management, scrap metals and industrial services company, from April 1998 to November 1998.  Mr. Pardo currently serves on the Board of Directors of Synthes, Inc.  He also served as a Director of Philip Services, Inc. from 1994 to 2003, Newalta Corporation from 1991 to 2009, and other public companies, including Western Prospector Group Ltd, Exchange National Bank, Chicago, Invatec (valve distribution), ISG Technologies (medical imaging) and Panaco, Inc. (oil and gas exploration and production).  He has served as a Dynegy director since 2011.

K.                                    Dynegy’s Officers

Set forth below are the names and positions of the current key executive officers of Dynegy.  A brief biography of each of the officers is provided immediately following this list.

Carolyn J. Burke.  Ms. Burke serves as Executive Vice President and Chief Administrative Officer with overall responsibility for the corporate functions including Human Resources, Information Technology, Investor Relations and Communications, and Business Services.  Prior to joining the Company in August 2011, Ms. Burke served as Global Controller for J.P. Morgan’s Global Commodities business since March 2008.  She was also NRG Energy’s Vice President and Corporate Controller from September 2006 to March 2008 and Executive Director of Planning and Analysis from April 2004 to September 2006.  Prior to joining NRG Energy, Ms. Burke held various key financial roles at Yale University, the University of Pennsylvania and at Atlantic Richfield Company (now British Petroleum).

Catherine B. Callaway.  Ms. Callaway serves as Executive Vice President and General Counsel since September 2011.  Ms. Callaway is responsible for Dynegy’s legal affairs, including legal services supporting Dynegy’s operational, commercial and corporate areas, as well as ethics and compliance.  In addition, she is immediately involved in the restructuring efforts underway at the Company.  Ms. Callaway served as General Counsel for NRG Gulf Coast and Reliant Energy from August 2011 until September 2011.  She also served as General Counsel for NRG Texas and Reliant Energy from August 2010 to August 2011 and General Counsel for NRG Texas from November 2007 to August 2010.  Prior to joining NRG, Ms. Callaway held various key legal roles at Calpine Corporation, Reliant Energy, The Coastal Corporation and Chevron.

Robert C. Flexon.  Mr. Flexon serves as President and Chief Executive Officer.  Prior to joining the Company in July 2011, he served as the Chief Financial Officer of UGI Corporation,

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a distributor and marketer of energy products and related services from February to June 2011.  He was the Chief Executive Officer of Foster Wheeler AG from June 2010 until October 2010 and the President and Chief Executive Officer of Foster Wheeler USA from November 2009 until May 2010.  Prior to joining Foster Wheeler, Mr. Flexon was Executive Vice President and Chief Financial Officer of NRG Energy, Inc. from February 2009 until November 2009.  He previously served as Executive Vice President and Chief Operating Officer of NRG Energy from March 2008 until February 2009 and as its Executive Vice President and Chief Financial Officer from 2004 to 2008.  Prior to joining NRG Energy, Mr. Flexon held various key executive positions with Hercules, Inc. and Atlantic Richfield Company.  Mr. Flexon served on the board of directors of Foster Wheeler from 2006 until 2009 and from May 2010 until October 2010.  He has served as a Dynegy director since 2011.

Clint C. Freeland.  Mr. Freeland has served as Executive Vice President and Chief Financial Officer since July 2011.  He served as NRG Energy’s Senior Vice President, Strategy & Financial Structure from February 2009 to June 2011, where he developed a venture capital partnership investment fund to invest in emerging energy company technologies.  He was NRG Energy’s Senior Vice President and Chief Financial Officer from February 2008 to February 2009 and its Vice President and Treasurer from April 2006 to February 2008.  Prior to joining NRG Energy, Mr. Freeland held various key financial roles within the energy sector.

Kevin T. Howell.  Mr. Howell has served as Executive Vice President and Chief Operating Officer since July 2011.  He retired in August 2010 from NRG Energy, where he had served as President of NRG Texas and Reliant Energy since August 2008.  Prior to that, he was NRG Energy’s Executive Vice President and Chief Administrative Officer from January 2008 to August 2008 and Executive Vice President, Commercial Operations from August 2005 to January 2008.  Before joining NRG Energy, Mr. Howell served in a variety of operating and commercial positions with several domestic and international energy companies.

L.                                     Material Prepetition Litigation

DH is a defendant, along with certain non-Debtor affiliates, in three cases recently filed in New York State Supreme Court relating to the Prepetition Restructurings.  These cases are Avenue Investments, L.P., et al. v. Dynegy Inc., et al., Index No. 652599/2011 (New York County, filed Sept. 21, 2011), The Successor Lease Indenture Trustee, et al. v. Dynegy Inc., et al., Index No. 652642/2011 (New York County, filed Sept. 27, 2011), and Resources Capital Management Corp., et al. v. Dynegy Inc., et al., Index No. 653067/11 (New York County, filed Nov. 4, 2011).  Plaintiffs in these cases challenge DGIN’s transfer of Dynegy Coal Holdco, LLC to Dynegy, alleging, inter alia, that the challenged transfer constituted a fraudulent conveyance under New York law or, in the alternative, an unlawful dividend or distribution from a subsidiary to its parent.  Plaintiffs also assert causes of action for breach of fiduciary duties against the directors of Dynegy and the managers of DH and DGIN, and seek to pierce the corporate veil between Dynegy, DH and DGIN.  The Lease Indenture Trustee plaintiff also asserts breach of contract and quasi-contract claims against defendants for alleged breaches of the Danskammer Lease Guaranty and the Roseton Lease Guaranty (together, the “Lease Guarantees”).  Plaintiffs seek a judgment setting aside and annulling the challenged transfer and related transactions or awarding damages.

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DH was also a defendant in two prior state court actions asserting similar claims.  Roseton OL, LLC & Danskammer OL, LLC v. Dynegy Holdings, Inc., (C.A. No. 6689-VCP) in the Court of Chancery of the State of Delaware and LibertyView Credit Opportunities Fund, L.P. et al. v. Dynegy Holdings, Inc., Index No. 651998/11 (New York County, filed July 21, 2011).  Plaintiffs in the Delaware action, the Danskammer Lease Guaranty Party and the Roseton Lease Guaranty Party (together, the “Lease Guaranty Parties”), sought injunctive relief to prevent the consummation of certain of the Prepetition Restructurings.  The LibertyView case was stayed in favor of the Delaware action.  The Delaware court denied the plaintiffs’ request and both the Court of Chancery and the Delaware Supreme Court denied the plaintiffs’ requests for interlocutory appeal.  The plaintiffs then voluntarily dismissed the Delaware action in August 2011.  LibertyView’s case was discontinued by the New York state court on August 19, 2011.  The more recent New York lawsuit by the Lease Guaranty Parties (with Resource Capital Management Corp. as lead plaintiff) asserts many of the same claims which the Delaware court found unlikely to succeed.

On October 31, 2011, DH and its non-Debtor co-defendants filed motions to dismiss the Avenue Investments and Lease Indenture Trustee complaints.  Among other things, the defendants asserted that the complaints failed to state a claim upon which relief could be granted because the plaintiffs are not creditors of the transferor (DGIN) with respect to the asserted fraudulent transfer claims, and the defendants did not breach any agreements with the plaintiffs in engaging in the Prepetition Restructurings.  Pursuant to the Noteholder Restructuring Support Agreement, the Avenue Investments plaintiffs and the defendants entered into a stipulation staying that state court litigation while the Noteholder Restructuring Support Agreement is in force.

On November 21, 2011, the parties to the Lease Indenture Trustee action filed a stipulation to stay that action unless and until the court rules that the automatic stay does not apply during the pendency of these Chapter 11 Cases.  Also on November 21, 2011, the defendants filed a Notice of Filing of Bankruptcy Petition and of the Automatic Stay in the three cases recently filed in New York State Supreme Court to alert interested parties to the existence of these Chapter 11 Cases and the applicability of the automatic stay.

M.                                  Information on the Plan Proponents

THE PLAN PROPONENTS ARE DYNEGY AND DH.  AS DESCRIBED ABOVE, DYNEGY IS A HOLDING COMPANY THAT CONDUCTS SUBSTANTIALLY ALL OF ITS BUSINESS OPERATIONS THROUGH ITS SUBSIDIARIES.  DH IS A DIRECT SUBSIDIARY OF DYNEGY AND A HOLDING COMPANY THAT CONDUCTS SUBSTANTIALLY ALL OF ITS BUSINESS OPERATIONS THROUGH ITS SUBSIDIARIES.  THE PLAN PROPONENTS ARE FURTHER DESCRIBED ABOVE.

VII.

SELECTED FINANCIAL INFORMATION

Attached hereto as Exhibit “C” is selected financial information for Dynegy and DH, including (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements

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of Operations and (iii) Condensed Consolidated Statements of Cash Flows.  The selected financial information attached as Exhibit “C” should be read in conjunction with the financial statements and notes thereto included in the Annual Report of Dynegy and DH on Form 10-K for the year ended December 31, 2010 that was filed on March 8, 2011, which is available at the SEC’s website at http://www.sec.gov and on Dynegy’s website at http://www.dynegy.com/investor_relations/investor_relations.asp.  The quarterly financial statements of (i) Dynegy should be read in conjunction with the financial statements and notes thereto included in the Quarterly Report of Dynegy on Form 10-Q for the quarter ended September 30, 2011 that was filed on November 14, 2011 and (ii) DH should be read in conjunction with the financial statements and notes thereto included in the Quarterly Report of Dynegy and DH on Form 10-Q for the quarter ended June 30, 2011 that was filed on August 8, 2011, each of which is available at the SEC’s website at http://www.sec.gov and on Dynegy’s website at http://dynegy.com/investor_relations/investor_relations.asp.

VIII.

FINANCIAL PROJECTIONS AND ASSUMPTIONS

The Plan Proponents have prepared the projected operating and financial results (the “Projections”) for Dynegy, on a consolidated basis, through the period ending, 2016.  The Projections are attached to this Disclosure Statement as Exhibit “D.”

The Projections should be read in conjunction with the assumptions, qualifications, and the footnotes to the tables containing the Projections as well as the “Risk Factors” section of this Disclosure Statement.

THE PROJECTIONS ARE PRESENTED SOLELY FOR THE PURPOSE OF PROVIDING “ADEQUATE INFORMATION” UNDER SECTION 1125 OF THE BANKRUPTCY CODE TO ENABLE THE HOLDERS OF CLAIMS ENTITLED TO VOTE UNDER THE PLAN TO MAKE AN INFORMED JUDGMENT ABOUT THE PLAN AND SHOULD NOT BE USED OR RELIED UPON FOR ANY OTHER PURPOSE, INCLUDING THE PURCHASE OR SALE OF SECURITIES OF, OR CLAIMS OR EQUITY INTERESTS IN, DH, DYNEGY OR ANY OF THEIR AFFILIATES.

THE ASSUMPTIONS AND RESULTANT PROJECTIONS AND SUBSEQUENTLY IDENTIFIED VARIANCES CONTAIN CERTAIN STATEMENTS THAT MAY BE CONSIDERED “FORWARD-LOOKING STATEMENTS” WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.  THE PROJECTIONS HAVE BEEN PREPARED BY THE PLAN PROPONENTS’ MANAGEMENT AND PROFESSIONALS.  THESE PROJECTIONS AND SUBSEQUENTLY IDENTIFIED VARIANCES, WHILE PRESENTED WITH NUMERICAL SPECIFICITY, ARE BASED UPON A VARIETY OF ESTIMATES AND ASSUMPTIONS WHICH, THOUGH CONSIDERED REASONABLE BY MANAGEMENT, MAY NOT BE REALIZED OR MAY BE UNDERSTATED, AND ARE INHERENTLY SUBJECT TO SIGNIFICANT BUSINESS, ECONOMIC, AND COMPETITIVE UNCERTAINTIES AND CONTINGENCIES, MANY OF WHICH ARE BEYOND THE PLAN PROPONENTS’ CONTROL.  THE PLAN PROPONENTS CAUTION THAT NO ASSURANCES CAN BE MADE AS TO THE

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ACCURACY OF THE ASSUMPTIONS AND RESULTANT PROJECTIONS OR THE ABILITY OF DYNEGY TO ACHIEVE THE PROJECTED RESULTS FOLLOWING THE EFFECTIVE DATE.  SOME ASSUMPTIONS INEVITABLY WILL NOT MATERIALIZE, AND EVENTS AND CIRCUMSTANCES OCCURRING SUBSEQUENT TO THE DATE ON WHICH THE PROJECTIONS WERE PREPARED MAY BE DIFFERENT FROM THOSE ASSUMED, OR MAY BE UNANTICIPATED, AND THUS MAY AFFECT FINANCIAL RESULTS IN A MATERIAL AND POSSIBLY ADVERSE MANNER.  THE PROJECTIONS, THEREFORE, MAY NOT BE RELIED UPON AS A GUARANTY OR OTHER ASSURANCE OF THE ACTUAL RESULTS THAT WILL OCCUR.

THE PROJECTIONS WERE NOT PREPARED WITH A VIEW TO COMPLYING WITH THE GUIDELINES FOR PROSPECTIVE FINANCIAL STATEMENTS PUBLISHED BY THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS NOR IN ACCORDANCE WITH U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.  DYNEGY’S INDEPENDENT ACCOUNTANTS HAVE NEITHER EXAMINED NOR COMPILED THE PROJECTIONS AND, ACCORDINGLY, DO NOT EXPRESS AN OPINION OR ANY OTHER FORM OF ASSURANCE WITH RESPECT THERETO.

AS A MATTER OF COURSE, NEITHER DYNEGY, NOR DH, PUBLISH THEIR BUSINESS PLANS AND STRATEGIES OR PROJECTIONS OF THEIR ANTICIPATED FINANCIAL POSITION OR RESULTS OF OPERATIONS.  ACCORDINGLY, THE PLAN PROPONENTS DO NOT INTEND, AND DISCLAIM ANY OBLIGATION, TO: (1) FURNISH UPDATED BUSINESS PLANS OR PROJECTIONS TO HOLDERS OF CLAIMS OR EQUITY INTERESTS PRIOR TO THE EFFECTIVE DATE, OR TO HOLDERS OF SECURITIES OF DH OR DYNEGY, OR ANY OTHER PARTY AFTER THE EFFECTIVE DATE; (2) INCLUDE SUCH UPDATED INFORMATION IN ANY DOCUMENTS THAT MAY BE REQUIRED TO BE FILED WITH THE SEC; OR (3) OTHERWISE MAKE SUCH UPDATED INFORMATION PUBLICLY AVAILABLE.  HOWEVER, FROM TIME TO TIME, DYNEGY AND DH MAY PREPARE UPDATED PROJECTIONS IN CONNECTION WITH PURSUING FINANCING, CREDIT RATINGS AND OTHER PURPOSES.  SUCH PROJECTIONS MAY DIFFER MATERIALLY FROM THE PROJECTIONS PRESENTED HEREIN.

IX.

THE REORGANIZATION CASES

A.                                    Commencement of the Chapter 11 Cases

On November 7, 2011, DH and each of the other Debtors filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code in the Bankruptcy Court, and the Chapter 11 Cases were assigned to the Honorable Cecelia G. Morris.

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B.                                    First Day Pleadings

1.                                      Joint Administration

In order to expedite the administration of the Chapter 11 Cases and reduce administrative expenses, the Debtors sought the joint administration of the Chapter 11 Cases.  On November 9, 2011, the Bankruptcy Court issued an order directing the joint administration of the Debtors’ Chapter 11 Cases for procedural purposes [Docket No. 32].

2.                                      Case Management

In order to maximize the efficiency and orderly administration of the Chapter 11 Cases, the Debtors sought approval of an order implementing case management procedures.  On November 9, 2011, the Bankruptcy Court entered an order implementing case management procedures that: (a) established requirements for filing and serving notices, motions, applications, declarations, objections, responses, memoranda, briefs, supporting documents and other papers filed in these Chapter 11 Cases; (b) delineated standards for service of notices of hearings and agenda letters; (c) fixed periodic omnibus hearing dates and articulated mandatory guidelines for scheduling hearings and objection deadlines; and (d) limited matters that are required to be heard by the Court [Docket No. 35].

3.                                      Extension of Deadline for Filing Schedules and Statements

Given the size and complexity of the Debtors’ businesses, the number of Debtors and the number of potential creditors of the Debtors, and the numerous burdens imposed by the Debtors’ reorganization efforts, particularly in the early days of these Chapter 11 Cases, the Debtors sought approval of an extension of the deadline for filing their Schedules and Statements.  On November 10, 2011, the Bankruptcy Court granted an extension of thirty-one (31) days, for a total of forty-five (45) days from the Petition Date, for the Debtors to file their Schedules and Statements [Docket No. 43].

4.                                      Retention of a Claims and Noticing Agent and Administrative Agent

The Debtors filed applications to employ Epiq as claims and noticing agent and administrative agent in order to expedite the distribution of notices and processing of claims and relieve the Bankruptcy Court’s Clerk’s office of the administrative burden of a potentially overwhelming number of claims.  The Debtors reviewed at least three engagement proposals from Court-approved claims and noticing agents to ensure selection through a competitive process.  The Bankruptcy Court granted the Debtors’ application to employ Epiq as claims and noticing agent on November 15, 2011 [Docket No. 58].

5.                                      Limitation of Service

The Debtors sought approval of, and the Bankruptcy Court issued on November 15, 2011, an order (i) authorizing the Debtors to prepare a consolidated list of creditors in the format or formats maintained in the ordinary course of business in lieu of submitting a mailing matrix, (ii) authorizing the Debtors to file a consolidated list of their thirty (30) largest unsecured creditors, and (iii) approving the form and manner of notice of the commencement of the

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Debtors’ Chapter 11 Cases.  [Docket No. 60].  The Debtors have over 1000 creditors, and converting computerized information to a format compatible with creditor matrix requirements would be an exceptionally burdensome task and would greatly increase the risk of error with respect to information already intact on computer systems maintained by the Debtors or their agents.  Additionally, the top twenty (20) creditor lists of several of the Debtors would overlap, and certain other Debtors may have fewer than twenty (20) identifiable unsecured creditors, rendering separate top twenty (20) lists of limited utility.  Further, the Debtors sought authorization to publish notice of the commencement of the Chapter 11 Cases for the benefit of creditors who do not directly receive the notice of the commencement of the Chapter 11 Cases by mail and other creditors and parties in interest of the commencement of the Cases.

6.                                      Business Operations

a.                                       Cash Management

As is typical with most corporate enterprises, the Debtors had in place as of the Petition Date a cash management system for the collection of receipts and the disbursement of funds.  The Debtors use a cash management system that consists of two (2) separate segregated cash management systems, one each for DH and DNE.  The cash management system for DNE is autonomously managed pursuant to the terms of a cash management agreement between DNE and certain of its non-Debtor affiliates; the cash management system for DH is not governed by a written agreement, but the accounts in each system are carefully managed through oversight procedures and controls implemented by Dynegy.  Through their use of the cash management system, the Debtors are able to facilitate cash forecasting and reporting, monitor collections and disbursements of funds, and maintain control over the administration of various bank accounts that are required to effect the collection, disbursement, and movement of cash.  Because it is critical that the Debtors’ cash be managed without interruption and all transfers of funds be coordinated for the efficient and effective operation of the Debtors’ businesses and the power generation facilities during the transition of operations of such facilities, the Debtors sought authority to continue to utilize their cash management systems.  On November 10, 2011, the Bankruptcy Court issued an interim order authorizing the Debtors to continue to use their existing cash management system, bank accounts, and disbursement accounts, provided that any check drawn or issued by the Debtors before the Petition Date may only be honored if specifically authorized by order of the Bankruptcy Court.  The Bankruptcy Court further ordered that the Debtors shall use their best efforts to print “Debtor in Possession” or “DIP” on their business forms immediately following the Petition Date [Docket No. 42].

b.                                      Utility Services

In connection with the operation of their businesses and management of their properties, the Debtors obtain from certain utility companies (the “Utility Providers”) a wide range of utility services (collectively, the “Utility Services”) in the ordinary course of business for, among other things, water, sewer service, electricity, telephone, data services and other similar services.  On November 9, 2011, the Bankruptcy Court issued an interim order (i) prohibiting utility providers from altering, refusing or discontinuing Utility Services, (ii) deeming Utility Providers adequately assured of future performance, and (iii) establishing procedures for resolving requests for additional adequate assurance of future payment [Docket No. 39].  Pursuant to the order,

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within twenty (20) days of the Petition Date, the Debtors must deposit a sum equal to fifty percent (50%) of the Debtors’ estimated average monthly cost of Utility Services into an interest bearing, newly-created, segregated account for the purpose of providing each Utility Provider adequate assurance of payment of its post-petition Utility Services to the Debtors.

c.                                       Payment of Prepetition Claims of Critical Vendors, Shippers and Other Lien Claimants

While operating the power generation facilities for the benefit of the Owner Lessors until the transition of operational control, the Debtors need to ensure continuous delivery of goods and services necessary to ensure compliance with applicable regulatory requirements.  Any significant disruption in the Debtors’ vendor network, such as a vendor halting delivery of certain necessary materials or fuel, or a vendor refusing to perform duties necessary for the Debtors to comply with the multi-faceted regulatory regime governing the Debtors’ businesses, could result in one or both of the power generation facilities shutting down, potentially causing blackouts in the New York state area.  Such a result would have a devastating impact on the Debtors’ ability to maintain operations in accordance with regulatory requirements, pending regulatory approval to transition operational control of the power generation facilities to the Owner Lessors.  Accordingly, the Debtors sought, and on November 10, 2011, the Bankruptcy Court issued, an interim order authorizing the Debtors to pay, in their sole discretion, among other things, certain prepetition claims of critical vendors, shippers, lien claimants, and outstanding order vendors [Docket No. 44].

d.                                      Continued Marketing, Selling and Trading of Energy Through Dynegy Power Marketing, Inc.

As further described in the subsection of this Disclosure Statement entitled “General Information — Overview of the Debtors’ Businesses,” Dynegy Danskammer and Dynegy Roseton are not currently authorized NYISO customer and market participants.  DPM, a non-Debtor affiliate and an energy marketer that is a registered NYISO customer and market participant and that is authorized to sell energy, capacity and certain ancillary services at market-based rates, provides energy management services to Dynegy Roseton and Dynegy Danskammer pursuant to energy management agreements dated August 4, 2011 (the “EMAs”).  Dynegy Danskammer and Dynegy Roseton rely on DPM’s services under the EMAs to fulfill their regulatory obligations.  The Debtors sought the Bankruptcy Court’s authority to continue, in the ordinary course of business, the marketing, sale and trading of energy through DPM.  The Bankruptcy Court issued an interim order on November 9, 2011 authorizing, but not requiring, the Debtors to continue operating, in the ordinary course of business, under the terms of the EMAs with DPM, including with respect to the marketing and sale of energy, capacity and certain ancillary services [Docket No. 38].

e.                                       Payment of Prepetition Taxes and Assessments

The Debtors have several pre-petition tax obligations.  In certain instances during the ordinary course of business, the Debtors collect sales tax from their customers in connection with the sale of energy (the “Sales Taxes”) and periodically remit them to taxing authorities.  The Debtors also incur use taxes (the “Use Taxes”) in connection with the Debtors’ power generation

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activities, such as when the Debtors purchase tangible personal property and certain services, including power generation-related equipment.  The Debtors’ real and personal property is subject to state and local property taxes.  In addition, certain taxing authorities impose taxes on the Debtors for their use of petroleum, coal, natural gas and certain other hydrocarbons in connection with their generation of power.  The Debtors are also responsible for franchise taxes to certain taxing authorities to operate or otherwise do business in the applicable taxing jurisdiction.  Finally, due to the nature of the Debtors’ business, the federal government and various municipal and county governments require the Debtors to obtain permits or other business licenses and pay fees associated with such permits or licenses to conduct operations in their jurisdictions (the “Business License Fees”).  The Debtors estimated that the total amount of prepetition taxes and assessments owing to the various taxing authorities would not exceed approximately $1,205,000 and sought authorization to pay the total amount of prepetition taxes and assessments that they owe.  On November 9, 2011, the Bankruptcy Court issued an interim order authorizing, but not requiring, the Debtors to pay, in their sole discretion, all prepetition Sales Taxes, Use Taxes, and up to $105,000 in certain Business License Fees to all taxing authorities whether such taxes are currently determined to be owed or assessed at any time prior to a final hearing [Docket No. 37].

f.                                         Continuation of Prepetition Insurance Policies

In connection with their business operations, the Debtors maintain, both directly and through Dynegy, multiple insurance policies (collectively, the “Insurance Policies”) in respect of, among other things, environmental site liability, workers compensation, business automobiles, excess liability and property liability, directors and officers, foreign liability, marine open ocean cargo, charterer’s legal liability, special coverage, non-owned aviation, property damage and business interruption, commercial crime and fiduciary.  The continuation of the Insurance Policies is crucial given that they preserve the value of the Debtors’ assets and, in many cases, such coverage is required by various regulations, laws and contracts that govern the Debtors’ business operations.  The Debtors sought authority to continue performing their obligations under the Insurance Policies, including the authority to pay any outstanding prepetition amounts, including adjusted premiums and installment payments that may come due in the ordinary course of business.  On November 9, 2011, the Bankruptcy Court issued an interim order authorizing the Debtors, in their discretion, to honor the terms of their Insurance Policies and pay installment payments that come due after the Petition Date but prior to the entry of a final order [Docket No. 36].

g.                                      Employee Wages and Benefits

Of particular importance to the Debtors’ efforts to stabilize their businesses and continue their operations uninterrupted was their ability to maintain the continued support and cooperation of their employees.  Accordingly, on the Petition Date, the Debtors filed a motion, in accordance with their existing plans, programs, and policies, but subject to certain limitations, to (i) pay prepetition wages, salaries, and other compensation to the Debtors’ employees, (ii) continue to pay and honor obligations relating to employee medical, insurance and other benefit programs, (iii) reimburse prepetition employee expenses, (iv) make payments relating to all deductions and withholdings, and (v) make all payments to third parties relating to the foregoing payments and

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contributions.  On November 16, 2011, the Bankruptcy Court granted such motion on an interim basis, substantially in the form requested by the Debtors [Docket No. 72].

h.                                      Intercompany Funding

Prior to the Petition Date, DNE, Hudson Power, Dynegy Danskammer and Dynegy Roseton (collectively, the “Borrower Debtors”) funded their operations through cash flows generated by their businesses and certain intercompany funding provided by DH.  Without such financing provided by DH, the Borrower Debtors would not have had the ability to continue operations at their energy-producing facilities and continue to generate revenues through the sale of such energy.  The Borrower Debtors had an immediate need to obtain funding in order to permit the orderly continuation of their business operations and implement the transition of the Leased Facilities to the Owner Lessors.  In addition, the Borrower Debtors continued to have other working capital and administrative funding needs.  Given the importance of the Debtors preserving and maintaining their estates during the transition period, the Debtors filed a motion (the “Intercompany Credit Facility Motion”) seeking authorization (i) to enter into secured post-petition financing arrangements (the “Intercompany Credit Facility”), pursuant to which DH would provide $15 million of intercompany financing on a revolving post-petition basis to the Borrower Debtors; and (ii) for the Borrower Debtors (a) to guaranty, on a joint and several basis, the obligations arising under the Intercompany Credit Facility, (b) use proceeds from the Intercompany Credit Facility for working capital, corporate needs and administrative costs, and (c) grant liens and provide super-priority administrative claims.

On November 15, 2011, the Bankruptcy Court issued an order granting the Intercompany Credit Facility Motion on a limited, interim basis [Docket No. 59].  Specifically, the Bankruptcy Court authorized (i) the Debtors to enter into the Intercompany Credit Facility with a limited borrowing capacity of $5 million, (ii) the Borrower Debtors to use the proceeds of the Intercompany Credit Facility for working capital, general corporate purposes, and certain administrative expenses, and (iii) the Borrower Debtors to provide DH senior superpriority administrative expense claims against the Borrower Debtors with priority over any and all other claims, subject only to limited exceptions, against the Borrower Debtors.

i.                                          Rejection of Lease Documents Nunc Pro Tunc to the Petition Date

On November 7, 2011, the Debtors filed the Motion to Reject the Lease Documents [Docket No. 5].(9)  As set forth in the Motion to Reject, the Debtors believe that the rejection of the Lease Documents is an appropriate exercise of their business judgment because the Lease Documents are significantly burdensome, provide no economic value to the Debtors’ estates and will impair the Debtors’ ability to reorganize absent rejection.

(9)                              On November 7, 2011, the Debtors also filed a Motion Pursuant to Section 365(d)(3) of the Bankruptcy Code and Federal Rule of Bankruptcy Procedure 9014 for Entry of an Order Extending the Time for Performance under the Lease Documents (which sought to temporarily extend the deadline by which they had to make a semiannual rent payment under the Lease Documents) [Docket No. 7], pending the Court’s decision on the rejection of the Lease Documents and the effective date of such rejection.  On November 8, 2011, the Debtors and the parties to the Lease Documents consensually agreed to extend the deadline for making such payment until after the hearing on the Motion to Reject.  See Consent Order [Docket No. 55].  On November 28, 2011, the deadline for making such payments was extended through December 28, 2011.

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The Leased Facilities earn revenue principally in three ways:  (i) the sale of electricity and related services to either NYISO or through third-party bilateral agreements; (ii) the sale of their “capacity” to either NYISO or through third-party bilateral agreements; and (iii) to a lesser extent, the sale of ancillary electrical services.  With respect to the sale of electricity, NYISO dispatches power generated at the Leased Facilities to meet real-time electricity demand in New York.  Pricing for the electricity is generally determined by the least efficient unit that NYISO needs to meet demand for a respective zone.  For the Debtors to earn revenue from generating electricity, their costs for fuel and operations must remain lower than the least efficient unit needed by NYISO.  To sell “capacity,” non-Debtor affiliate DPM markets its commitment for the units to be available as needed during future market periods.  Pricing for these sales is calculated as a function of NYISO’s annual required reserve margin, the estimated net cost of “new entrant” generation, estimated peak demand, and the actual amount of capacity bid into the market at or below the demand curve.  Lastly, the Debtors receive a relatively small amount of revenue in exchange for providing miscellaneous electrical services.

The economic performance of the Leased Facilities does not support continued operation by the Debtors.  Even excluding rent payments due under the Lease Documents, total gross margin at the plant level between August and December 2011 is projected to fall short of total operating expenses at the plant level by approximately $3 million.  Cash payment obligations arising under the Lease Documents by themselves add an additional expense of approximately $82.5 million during that period.

As explained in the Motion to Reject, the onerous terms of the Lease Documents impede any possible improvement in the Debtors’ financial health.  In addition to cash payments totaling approximately $82.5 million due on November 8, 2011, the Lease Documents require future payments of approximately $179 million in 2012, $142 million in 2013, $143 million in 2014, $143 million in 2015 and $105 million in the aggregate due from 2016 through lease expiration (February 8, 2035 for Dynegy Roseton and May 8, 2031 for Dynegy Danskammer).  These upcoming lease payments dwarf all current forecasts for potential cash flow that could be generated from the Leased Facilities over the remaining terms of the Facility Leases.

In addition to such large semiannual rent payments, the Lease Documents impose significant ongoing operational costs on the Debtors.  Among other things, the Debtor Lessees must maintain the Leased Facilities in accordance with “prudent industry practice” and in compliance with environmental laws, which requires the Debtor Lessees to make substantial capital expenditures to comply with environmental upgrade and regulatory requirements, as well as to make needed repairs.  In particular, the Lease Documents require that Dynegy Danskammer comply with newly enacted environmental regulations mandating upgrades to the Danskammer Facility by 2014 at a cost of approximately $375 million.  While these capital costs could be avoided by completely switching the plants to natural-gas operations, conversion would require additional upgrades to the gas delivery systems at the Leased Facilities (which could entail capital costs in an amount approaching $10-15 million) and, in any event, would significantly diminish the amount of revenue generated by the Leased Facilities.  Dynegy Roseton would likewise have to make substantial capital expenditures pursuant to the Lease Documents to upgrade the Roseton Facility to comply with a number of federal and state regulations scheduled to become effective in the next few years.  These ongoing expenses exacerbate the economic burden to the Debtors caused by the Lease Documents.

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Notwithstanding any relief that may be granted in connection with the Motion to Reject, the Debtor Lessees will operate the Leased Facilities in order to comply with applicable federal and state regulatory law, pending receipt of federal and state regulatory approval to the return of the Leased Facilities to the Owner Lessors.  Specifically, section 203 of the FPA requires that public utilities such as the Debtor Lessees obtain prior authorization from FERC before changing control of facilities such as the interconnection facilities that connect with each of the Leased Facilities.  Section 70 of the New York Public Service Law similarly requires that the Owner Lessors obtain regulatory approval from the NYPSC before taking control of the Leased Facilities.

On November 8, 2011, the Debtor Lessees filed an application with FERC requesting approval for the Owner Lessors to assume operational control of the plants and the associated interconnection facilities.  That same day, the Debtor Lessees also filed a verified petition with the NYPSC requesting a declaratory ruling disclaiming jurisdiction over the change in control or, in the alternative, expedited approval for the termination of the leasehold interests in the Leased Facilities and the reversion of the Leased Facilities and control over their operation to the Owner Lessors.

The Debtor Lessees have taken additional steps to facilitate an orderly and expeditious transition of operational control of the Leased Facilities.  To ensure compliance pending regulatory approval, the Debtor Lessees have developed a transition plan, which sets forth the proposed terms and conditions pursuant to which the Debtor Lessees will continue to operate the Leased Facilities after the Lease Documents are rejected and until the Owner Lessors become eligible themselves to control the Leased Facilities.  This transition plan was attached to the Declaration of Kent R. Stephenson in Support of First Day Motions filed on November 8, 2011 [Docket No. 18].

C.                                    Representation of DH

On or about September 27, 2011, DH and the other Debtors retained, subject to the Bankruptcy Court’s approval, Sidley Austin LLP (“Sidley”) as general bankruptcy counsel in connection with a potential chapter 11 filing of the Debtors in the event the Company’s restructuring efforts could not be completed fully out of court.  Sidley has been acting as lead counsel for the Debtors in the Chapter 11 Cases.  On November 15, 2011, the Debtors sought the Bankruptcy Court’s authority to employ and retain Sidley, as attorneys for the Debtors and Debtors in Possession, nunc pro tunc to the Petition Date pursuant to section 327(a) of the Bankruptcy Code [Docket No. 69] (the “Sidley Retention Motion”).

On or about April 11, 2011, White & Case LLP (“W&C”) was retained in connection with the Prepetition Restructurings.  Given, among other things, the substantial services relating to the Lease Documents performed by W&C in connection with Prepetition Restructurings and its particular expertise with the rejection of power plant leases, the Debtors determined that W&C should continue to represent the Debtors as special counsel in matters relating to the Lease Documents, including in connection with the Chapter 11 Cases, subject to the Bankruptcy Court’s approval.  On November 18, 2011, the Debtors sought the Bankruptcy Court’s authority to employ and retain W&C as special counsel to the Debtors nunc pro tunc to the Petition Date

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pursuant to Section 327(e) of the Bankruptcy Code [Docket No. 91] (the “W&C Retention Motion”).

On November 15, 2011, the Debtors sought the Bankruptcy Court’s authority to employ and retain FTI Consulting, Inc., as financial advisor and consultant, nunc pro tunc to the Petition Date pursuant to section 327(a) of the Bankruptcy Code [Docket No. 64] (the “FTI Retention Motion”).

Prior to the Petition Date, the Debtors employed certain professionals, in the ordinary course of business, to render services to their estates (such professionals collectively, the “Ordinary Course Professionals”) which were necessary to the continuation of the Debtors’ day-to-day operations.  On November 15, 2011, the Debtors sought the Bankruptcy Court’s authority to retain, employ and compensate certain Ordinary Course Professionals [Docket No. 65] (together with the Sidley Retention Motion, the FTI Retention Motion, and the W&C Retention Motion, the “Retention Motions”).

D.                                    Formation and Representation of the Creditors’ Committee.

On November 16, 2011, the United States Trustee for the Southern District of New York (the “U.S. Trustee”) appointed the Creditors’ Committee.  The Creditors’ Committee retained as counsel the law firm of Akin Gump Strauss Hauer & Feld LLP, One Bryant Park, New York, New York 10036.

The Creditors’ Committee is currently comprised of the following members:

E.                                      Interim Compensation and Reimbursement of Professional Persons and Committee Members

In an effort to permit the Debtors to closely monitor the costs of administration of the Chapter 11 Cases, forecast cash flows, and implement efficient cash management procedures,

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and to allow the Court and parties in interest, including the U.S. Trustee, to ensure the reasonableness and necessity of the compensation and reimbursement requested, the Debtors developed procedures for interim compensation and reimbursement of expenses of professionals whose services are authorized by the Bankruptcy Court pursuant to either section 327 or section 1103 of the Bankruptcy Code and for reimbursement of reasonable out-of-pocket expenses incurred by members of any statutory committee of unsecured creditors appointed in the Chapter 11 Cases.  On November 15, 2011, the Debtor moved for the entry of an order establishing an orderly, regular process for the monthly allowance and payment of compensation and reimbursement of expenses (the “Interim Compensation Motion”).

F.                                      Adversary Proceeding Filed by the Lease Indenture Trustee

On November 11, 2011, the Lease Indenture Trustee commenced an adversary proceeding against Dynegy Roseton, Dynegy Danksammer and DH seeking a declaration that: (i) the Lease Documents are not leases of real property; (ii) the Lease Documents are financings, not leases; and (iii) notwithstanding the lease rejection claims, the Lease Guaranty Claims are not subject to a cap pursuant to section 502(b)(6) of the Bankruptcy Code.  The Debtors disagree and intend to assert all applicable defenses and counterclaims in response to this adversary proceeding, including seeking to dismiss the adversary proceeding.

G.                                    Request for Appointment of an Examiner

On November 11, 2011, the Lease Indenture Trustee filed a motion with the Bankruptcy Court seeking the appointment of an examiner pursuant to section 1104(c) of the Bankruptcy Code (the “Examiner Motion”).  In the Examiner Motion, the Lease Indenture Trustee alleges, among other things, that the Prepetition Restructurings constitute a scheme, involving fraudulent transfers, breach of contract, and breach of fiduciary duties, to improperly benefit Dynegy and its equity holders at the expense of DH’s creditors, and requests that the Bankruptcy Court appoint an examiner to investigate and report on conduct of DH, certain affiliates of DH, the directors of the foregoing, and certain significant equity holders of Dynegy in connection with the Prepetition Restructurings.  The Debtors and Dynegy believe that the Lease Indenture Trustee’s allegations lack merit and intend to oppose the Examiner Motion.

H.                                    Motion to Dismiss

On November 18, 2011, the PSEG Entities filed a Motion for Entry of an Order Dismissing Debtors’ Chapter 11 Cases Pursuant to 11 U.S.C. § 1112(B) (the “Motion to Dismiss”) [Docket No. 92].  In the Motion to Dismiss, the PSEG Entities seek to dismiss the Chapter 11 Cases, alleging, among other things, that the Debtors improperly filed these cases solely in order to cap damages related to the Facility Leases pursuant to section 502(b)(6) of the Bankruptcy Code.  The Debtors and Dynegy believe that the PSEG Entities’ allegations lack merit and intend to oppose the Motion to Dismiss.

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X.

THE CHAPTER 11 PLAN

As a result of the chapter 11 process and through the Plan, the Plan Proponents expect that creditors will obtain a substantially greater recovery from the Estate than the recovery that would be available if the Assets had been liquidated under chapter 7 of the Bankruptcy Code.  The Plan is annexed hereto as Exhibit “A” and forms part of this Disclosure Statement.  The summary of the Plan set forth below is qualified in its entirety by the more detailed provisions set forth in the Plan.

A.                                    Classification and Treatment of Claims and Equity Interests

Except as otherwise provided in the Plan, the classification scheme set forth in the Plan, applicable to all matters pertaining to organization, voting, confirmation, and distributions is as follows:

1.                                      Unclassified Claims

Administrative Claims and Priority Tax Claims are not classified under the Plan.  The treatment of such Claims under the Plan is described in the subsection of this Disclosure Statement entitled “Provisions for Treatment of Unclassified Claims under the Plan.”

2.                                      Classified Claims and Equity Interests

The Claims against and Equity Interests in DH that are classified under the Plan shall be classified under the Plan as follows:

Class 1 — Priority Claims.  Class 1 shall consist of all Priority Claims, other than Priority Tax Claims, against DH.

Class 2 — Secured Claims.  Class 2 shall consist of all Secured Claims against DH.

Class 3 — General Unsecured Claims.  Class 3 shall consist of all General Unsecured Claims against DH.

Class 4 — Convenience Claims.  Class 4 shall consist of all Convenience Claims against DH.

Class 5 — Equity Interests.  Class 5 shall consist of all Equity Interests in DH.

Treatment of the Claims against and Equity Interests in DH that are classified under the Plan is described in the subsection of this Disclosure Statement entitled “Provisions for Treatment of Classified Claims and Equity Interests Under the Plan.”

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B.                                    Identification of Classes of Claims and Equity Interests as Impaired or Unimpaired

1.                                      Unimpaired Classes of Claims and Equity Interests

Class 1 — Priority Claims, Class 2 — Secured Claims, Class 4 — Convenience Claims, and Class 5 — Equity Interests are not impaired under the Plan.  In accordance with section 1126 of the Bankruptcy Code, holders of such Claims and Equity Interests are conclusively deemed to have accepted the Plan and their votes shall not be solicited by the Plan Proponents.

2.                                      Impaired Class of Claims

Class 3 — General Unsecured Claims is impaired under the Plan.  In accordance with section 1126 of the Bankruptcy Code, holders of such Claims are entitled to vote to accept or reject the Plan.

3.                                      Impairment Controversies

In the event that the holder of any Claim or Equity Interest disputes the classification of its Claim or Equity Interest as set forth in the Plan, such holder may timely submit such dispute to the Bankruptcy Court, and the Bankruptcy Court shall, after notice and hearing, resolve such dispute.

C.                                    Provisions for Treatment of Classified Claims and Equity Interests Under the Plan

The Plan treats the classes of Claims against and Equity Interests in DH as follows:

1.                                      Class 1 — Priority Claims

Each holder of an Allowed Priority Claim against DH shall be left unimpaired under the Plan, and, pursuant to section 1124 of the Bankruptcy Code, all of the legal, equitable and contractual rights to which such Claim entitles such holder in respect of such Claim shall be left unaltered, and except to the extent that a holder of an Allowed Priority Claim and the Plan Proponents agree on less favorable treatment for such holder, such Allowed Priority Claim against DH (including any amounts to which such holder is entitled pursuant to section 1124(2) of the Bankruptcy Code) shall be paid in full in accordance with such rights on the Plan Distribution Date.

2.                                      Class 2 — Secured Claims

Each holder of an Allowed Secured Claim against DH shall be left unimpaired under the Plan, and, pursuant to section 1124 of the Bankruptcy Code, all of the legal, equitable and contractual rights to which such Claim entitles such holder in respect of such Claim shall be left unaltered, and except to the extent that a holder of an Allowed Secured Claim and the Plan Proponents agree on less favorable treatment for such holder, such Allowed Secured Claim against DH (including any amounts to which such holder is entitled pursuant to section 1124(2) of the Bankruptcy Code) shall be paid in full in accordance with such rights on the Plan Distribution Date or, if due after the Plan Distribution Date, as and when such payment is due.

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3.                                      Class 3 — General Unsecured Claims

Except to the extent that a holder of an Allowed General Unsecured Claim and the Plan Proponents agree on less favorable treatment for such holder, each holder of an Allowed General Unsecured Claim against DH shall receive, on the Effective Date, its Pro Rata Share of (i) the Plan Cash Payment, (ii) the Plan Preferred Stock, and (iii) at the sole option of Dynegy, in its capacity as a Plan Proponent, either (a) the Plan Secured Notes or (b) the Plan Secured Notes Alternative Payment.

The rights of holders of Allowed Subordinated Notes Claims to receive Plan Distributions shall be subject to the subordination provisions set forth in Section 16.5 of the Plan; provided, however, that holders of Allowed Subordinated Notes Claims may make the Subordination Alternative Election as set forth in Section 16.5 of the Plan.

4.                                      Class 4 — Convenience Claims

Each holder of an Allowed Convenience Claim against DH shall be left unimpaired under the Plan, and, pursuant to section 1124 of the Bankruptcy Code, all of the legal, equitable and contractual rights to which such Claim entitles such holder in respect of such Claim shall be left unaltered, and such Allowed Convenience Claim against DH (including any amounts to which such holder is entitled pursuant to section 1124(2) of the Bankruptcy Code) shall be paid in full in accordance with such rights on the Plan Distribution Date or, if after the Plan Distribution Date, as and when such payment is due.

5.                                      Class 5 — Equity Interests

Each holder of an Allowed Equity Interest in DH shall be left unimpaired under the Plan, and, pursuant to section 1124 of the Bankruptcy Code, all of the legal, equitable and contractual rights to which such Allowed Equity Interest entitles such holder in respect of such Allowed Equity Interest shall be left unaltered.

D.                                    Provision for Treatment of Intercompany Claims

Except as otherwise set forth in the Plan, Intercompany Claims shall, solely for purposes of receiving distributions under the Plan, be treated as having been resolved by compromise or otherwise eliminated, and thus, holders of Intercompany Claims shall receive no distribution under the Plan on account of such Intercompany Claims.  After the Effective Date, Intercompany Claims may be compromised or otherwise eliminated as determined by the Plan Trust Administrator or Disbursing Agent, as applicable.  Holders of Intercompany Claims shall not be entitled to vote on the Plan.

E.                                      Provisions for Treatment of Unclassified Claims Under the Plan.

1.                                      Unclassified Claims

As set forth above, the Plan provides that Administrative Claims and Priority Tax Claims shall be treated in accordance with sections 1129(a)(9)(A) and 1129(a)(9)(C) of the Bankruptcy

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Code, respectively.  Such Claims are not designated as classes of Claims for the purposes of the Plan or for the purposes of sections 1123, 1124, 1125, 1126 or 1129 of the Bankruptcy Code.

a.                                       Administrative Claims

Each holder of an Administrative Claim that is not (i) a Fee Claim, (ii) a liability incurred and payable in the ordinary course of business by DH (and not past due), or (iii) an Administrative Claim that has been Allowed on or before the Effective Date, must file with the Bankruptcy Court and serve on DH, the Plan Proponents, the Creditors’ Committee, and the Office of the United States Trustee, notice of such Administrative Claim within thirty (30) days after service of the Notice of Confirmation.  Such notice of Administrative Claim must include at a minimum (i) the name of the holder of the Administrative Claim, (ii) the amount of the Administrative Claim, and (iii) the basis of the Administrative Claim.  Failure to file and serve such notice timely and properly shall result in the Administrative Claim being forever barred and discharged.