Exhibit 99.2

UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF NEW YORK

DISCLOSURE STATEMENT RELATED TO THE JOINT CHAPTER 11 PLAN OF

REORGANIZATION FOR DYNEGY HOLDINGS, LLC AND DYNEGY INC.

Dated:   July 12, 2012

(1)  The Debtors, together with the last four digits of each such Debtor’s federal tax identification number, in the above-captioned cases jointly administered under Case No. 11-38111 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 such Debtors’ corporate headquarters and the service address for Dynegy Holdings, LLC, Dynegy Northeast Generation, Inc. and Hudson Power, L.L.C. is 601 Travis Street, Suite 1400, 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.

(2)  The last four digits of Dynegy Inc.’s federal tax identification number are 3152.  The location of its corporate headquarters and the service address is 601 Travis Street, Suite 1400, Houston, Texas 77002.

TABLE OF CONTENTS

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SCHEDULES AND EXHIBITS

* Exhibit A included as Exhibit 99.1 to the Current Report of Dynegy Inc. and Dynegy Holdings, LLC on Form 8-K filed July 13, 2012.

** Exhibit D filed as Form 10-Q of Dynegy Inc. on May 10, 2012.

*** Exhibit H included as Exhibit 10.1 to the Current Report of Dynegy Inc. and Dynegy Holdings, LLC on Form 8-K filed May 31, 2012.

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I.

INTRODUCTION

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 numbers where the terms are 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 JULY 3, 2012 (THE “DH DISCLOSURE STATEMENT ORDER”) [DH CHAPTER 11 CASES (AS DEFINED BELOW) DOCKET NO. 847](1), AND BY ORDER DATED JULY 10, 2012 (THE “DI DISCLOSURE STATEMENT ORDER”, AND TOGETHER WITH THE DH DISCLOSURE STATEMENT ORDER, “THE DISCLOSURE STATEMENT ORDERS”) [DYNEGY (AS DEFINED BELOW) DOCKET NO. 21](2), THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF NEW YORK (THE “BANKRUPTCY COURT”) APPROVED THE DISCLOSURE STATEMENT RELATING TO THE MODIFIED THIRD AMENDED CHAPTER 11 PLAN OF REORGANIZATION FOR DYNEGY HOLDINGS, LLC (“DH”) PROPOSED BY DH AND DYNEGY INC. (“DYNEGY”), DATED JUNE 18, 2012 AS FURTHER MODIFIED ON JUNE 29, 2012 [DH DOCKET NO. 842-1].  AS AUTHORIZED IN THE DISCLOSURE STATEMENT ORDERS, THIS DISCLOSURE STATEMENT HAS BEEN MODIFIED TO INCLUDE DYNEGY AND TO DESCRIBE THE JOINT CHAPTER 11 PLAN OF REORGANIZATION FOR DYNEGY HOLDINGS, LLC AND DYNEGY INC. (TOGETHER WITH, TO THE EXTENT THAT THE MERGER (AS DEFINED BELOW) OCCURS PRIOR TO THE EFFECTIVE DATE, AS APPLICABLE, THE SURVIVING ENTITY, THE “PLAN DEBTORS”) (THE “PLAN”), A COPY OF WHICH IS ATTACHED HERETO AS EXHIBIT “A.”  THE PLAN IS NOT A PLAN FOR DYNEGY NORTHEAST GENERATION, INC., HUDSON POWER, L.L.C., DYNEGY DANSKAMMER, L.L.C., AND DYNEGY ROSETON, L.L.C.

PURSUANT TO THE PLAN, CLASS 1 — PRIORITY CLAIMS, CLASS 2 — SECURED CLAIMS, AND CLASS 4 — CONVENIENCE CLAIMS ARE UNIMPAIRED AND ARE THEREFORE DEEMED TO HAVE ACCEPTED THE PLAN.  CLASS 5 — SECURITIES CLAIMS AND CLASS 6 — EQUITY INTERESTS ARE NOT ENTITLED TO DISTRIBUTIONS UNDER THE PLAN AND ARE THEREFORE DEEMED TO HAVE REJECTED THE PLAN.  ACCORDINGLY, EXCEPT AS OTHERWISE DESCRIBED HEREIN, THE PLAN DEBTORS ARE ONLY SOLICITING ACCEPTANCES OF THE PLAN FROM THE HOLDERS OF CLASS 3 — GENERAL UNSECURED CLAIMS.

(1)  All references herein to the docket in the DH Chapter 11 Cases (Case No. 11-38111(CGM)) shall be to “DH Docket No.”

(2)  All references herein to the docket in the Dynegy Chapter 11 Case (Case No. 12-36728(CGM)) shall be to “Dynegy Docket No.”

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THE PLAN IS THE PRODUCT OF EXTENSIVE NEGOTIATIONS BETWEEN AND AMONG, AND IS SUPPORTED BY, (I) THE PLAN DEBTORS, (II) THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS (THE “CREDITORS’ COMMITTEE”)(3), AND (III) ALL OF DH’S MAJOR CREDITOR CONSTITUENCIES WHO REPRESENT APPROXIMATELY $2.6 BILLION OF UNSECURED CLAIMS IN THE CHAPTER 11 CASES, IN PARTICULAR, (A) HOLDERS OF IN EXCESS OF $1.9 BILLION OF THE OUTSTANDING SENIOR NOTES CLAIMS (THE “CONSENTING SENIOR NOTEHOLDERS”), (B) U.S. BANK NATIONAL ASSOCIATION, AS SUCCESSOR INDENTURE TRUSTEE UNDER THE LEASE INDENTURES AND AS SUCCESSOR PASS THROUGH TRUSTEE UNDER THE PASS THROUGH TRUST AGREEMENT (THE “LEASE TRUSTEE”) AND HOLDERS OF APPROXIMATELY $342 MILLION OF THE OUTSTANDING LEASE CERTIFICATES (THE “CONSENTING LEASE CERTIFICATE HOLDERS”), (C) DANSKAMMER OL LLC, ROSETON OL LLC, DANSKAMMER OP LLC, ROSETON OP LLC, RESOURCES CAPITAL MANAGEMENT CORPORATION (“RCM”), AND RESOURCES CAPITAL ASSET RECOVERY, L.L.C., SERIES DD AND SERIES DR (COLLECTIVELY, THE “PSEG ENTITIES”),(4) AND (D) HOLDERS OF APPROXIMATELY $170 MILLION OF THE OUTSTANDING SUBORDINATED NOTES CLAIMS (THE “CONSENTING SUBORDINATED NOTEHOLDERS”).(5)

VOTING INSTRUCTIONS ARE CONTAINED IN THE DISCLOSURE STATEMENT ORDERS, TRUE AND CORRECT COPIES OF WHICH ARE ATTACHED HERETO AS EXHIBITS “B” AND “C.”  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 AUGUST 24, 2012 (THE “VOTING DEADLINE”).

(3)  Dynegy has represented that it does not believe that the aggregate amount of General Unsecured Claims against Dynegy will have any material impact on the ultimate outcome of voting or the treatment of Class 3 — General Unsecured Claims under the Plan.  Nevertheless, the ultimate resolution of any such Claims has not yet occurred.  Therefore, the Creditors’ Committee’s support of the Plan is subject to its review of, and satisfaction with, the Claims filed by stakeholders in the Dynegy Chapter 11 Case (as defined below), the aggregate amount thereof, and the resolution or adjudication of any objections to such Claims, including the aggregate Allowed amount of any such Claims.  To the extent that the Creditors’ Committee is not satisfied with any of the above, the Creditors’ Committee, in the exercise of its fiduciary duties, reserves all rights with respect to the Plan.

(4)  Pursuant to a settlement among Dynegy, the Debtors and the PSEG Entities, the PSEG Entities will have an allowed Claim against DH in the amount of $110 million.  See “The Reorganization Cases — PSEG Settlement”.

(5)  Pursuant to Section 5.02 of the Subordinated Notes Indenture and Section 3.16 of the NGC Trust Declaration, the beneficial holders of the NGC Trust Capital Income Securities shall be deemed to be the beneficial holders of the Subordinated Notes for purposes of solicitation and voting on the Plan.  Pursuant to the Settlement Agreement, DH agreed to provide the Subordinated Notes Indenture Trustee, for the benefit of holders of Subordinated Notes Claims, with an allowed subordinated unsecured claim in the amount of approximately $222.5 million on account of outstanding principal and interest and, for purposes of treatment of and distribution on such allowed subordinated unsecured claim under the Plan, provide the Subordinated Notes Indenture Trustee with an Allowed General Unsecured Claim in the aggregate amount of $55 million (which claim is not subject to subordination) in full satisfaction of all Subordinated Notes Claims.

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II.

NOTICE TO HOLDERS OF CLAIMS

The purpose of this Disclosure Statement is to enable each holder of a Claim that is impaired and entitled to vote 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 AND SCHEDULES ANNEXED TO THE PLAN AND 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 THE PLAN DEBTORS OR ANY OF THEIR 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 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

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OF THE PLAN AS TO HOLDERS OF CLAIMS AGAINST, OR EQUITY INTERESTS IN, THE PLAN DEBTORS, OR ANY OF THEIR AFFILIATES.

On July 5, 2012 after notice and a hearing, the Bankruptcy Court entered the DH 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 to make an informed judgment with respect to the acceptance or rejection of the Plan.  On July 10, 2012, after notice and a hearing, the Bankruptcy Court entered the DI Disclosure Statement Order approving the Disclosure Statement in Dynegy’s chapter 11 case (the “Dynegy Chapter 11 Case”), provided, however, that any parties in interest in the Dynegy Chapter 11 Case may, solely for the purpose of the Dynegy Chapter 11 Case, file a written objection to (i) the adequacy of the disclosure provided by the Disclosure Statement, (ii) solicitation procedures approved pursuant to the DI Disclosure Statement Order; (iii) findings Q, H, and J of the DI Disclosure Statement Order or (iv) the form of notice to holders of Equity Interests in Dynegy, by July 18, 2012 at 5:00 p.m., (Prevailing Eastern Time), and any such objection will be heard at the hearing to be held on July 23, 2012 at 10:00 a.m. (Prevailing Eastern Time).  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 Debtors and certain of the professionals they have retained, no person has been authorized to use or promulgate any information concerning DH, Dynegy, the Surviving Entity, their 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 Debtors.  YOU SHOULD NOT RELY ON ANY INFORMATION RELATING TO DH, DYNEGY, THE SURVIVING ENTITY, THEIR 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:  August 24, 2012 at 5:00 p.m., Prevailing Eastern Time.  Do not send your ballot directly to the Plan Debtors or to the Indenture Trustees.  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 Orders attached hereto as Exhibits “B” and “C.”

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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 a Claim or Equity Interest that is not entitled to vote on the Plan.  The Consenting Senior Noteholders, who hold in the aggregate in excess of $1.9 billion of the approximately $3.37 billion principal amount of Senior Notes Claims, the Consenting Lease Certificate Holders, who hold in the aggregate approximately $342 million of the outstanding Lease Certificates (as defined below), the PSEG Entities, who hold an Allowed General Unsecured Claim in the amount of $110 million, and the Consenting Subordinated Noteholders, who hold in the aggregate approximately $170 million of the approximately $206 million principal amount of Subordinated Notes Claims, have each agreed, subject to the terms and conditions contained in the Plan Support Agreement, to vote to accept the Plan.  See “The Reorganization Cases — Plan 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 September 5, 2012, at 10:00 a.m., Prevailing Eastern Time, before the Honorable Cecelia G. Morris, United States Bankruptcy Judge, at her Courtroom located at 355 Main Street, Poughkeepsie, New York 12601.  The Bankruptcy Court has directed that objections, if any, to confirmation of the Plan be filed and served on or before August 24, 2012, in the manner described in the Disclosure Statement Orders attached hereto as Exhibits “B” and “C.”

THE PLAN DEBTORS, THE SUPPORTING CREDITORS (AS DEFINED BELOW), AND THE CREDITORS’ COMMITTEE(6) 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

(6)  Dynegy has represented that it does not believe that the aggregate amount of General Unsecured Claims against Dynegy will have any material impact on the ultimate outcome of voting or the treatment of Class 3 - General Unsecured Claims under the Plan.  Nevertheless, the ultimate resolution of any such Claims has not yet occurred.  Therefore, the Creditors’ Committee’s support of the Plan is subject to its review of, and satisfaction with, the Claims filed by stakeholders in the Dynegy Chapter 11 Case, the aggregate amount thereof, and the resolution or adjudication of any objections to such Claims, including the aggregate Allowed amount of any such Claims.  To the extent that the Creditors’ Committee is not satisfied with any of the above, the Creditors’ Committee, in the exercise of its fiduciary duties, reserves all rights with respect to the Plan.

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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.  In addition, the Quarterly Report on Form 10-Q of Dynegy for the quarter ended March 31, 2012 is filed herewith on Exhibit “D” — “Selected Financial Information.”  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 Debtors “incorporate by reference” information into this Disclosure Statement. This means the Plan Debtors disclose important information to the holders of Claims entitled to vote on the Plan by referring such holders to another document filed separately with the SEC.  The information in the documents incorporated by reference is considered to be part of this Disclosure Statement. The Plan Debtors 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, as amended, of Dynegy for the fiscal year ended December 31, 2011;

·                  Quarterly Report on Form 10-Q of Dynegy for the period ended March 31, 2012;

·                  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, November 8, 2011, December 2, 2011, December 9, 2011, December 14, 2011, December 20, 2011, January 23, 2012, March 7, 2012, May 2, 2012, May 31, 2012, June 11 2012, and June 19, 2012 (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, November 22, 2011, December 2, 2011, January 9, 2012, February 3, 2012, March 2, 2012, March 8, 2012, April 11, 2012, May 10, 2012, July 6, 2012, July 10, 2012, and July 11, 2012 (to the extent such reports are filed); and

·                  Current Report on Form 8-K of DH filed on September 8, 2011, December 23, 2011 (as amended on February 15, 2012), January 25, 2012, March 19, 2012, March 28, 2012, April 27, 2012, May 31, 2012, and July 3, 2012 (to the extent such reports are filed).

Holders of Claims entitled to vote on the Plan can also obtain from the Plan Debtors, 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 Debtors may

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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

601 Travis Street, Suite 1400

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, and other parties in interest.

DH and certain of its direct and indirect subsidiaries (the “DH Debtors”)(7) commenced their chapter 11 cases with the filing of petitions for voluntary protection under chapter 11 of the Bankruptcy Code on November 7, 2011 (the “DH Petition Date”).  The DH Debtors’ chapter 11 cases (the “DH Chapter 11 Cases”) have been consolidated for procedural purposes only and are being jointly administered under Case No. 11-38111 (CGM).

Dynegy commenced its chapter 11 case (Dynegy, together with the DH Debtors and, to the extent that the Merger occurs prior to the Effective Date, as applicable, the Surviving Entity, the “Debtors”) with the filing of a petition for voluntary protection under chapter 11 of the Bankruptcy Code (together with the DH Chapter 11 Cases, the “Chapter 11 Cases”) on July 6, 2012 (the “Dynegy Petition Date”, and together with the DH Petition Date, the “Petition Dates”).  At the request of the United States Trustee for the Southern District of New York (the “United States Trustee”), the Dynegy Chapter 11 Case is being administered separately from the cases of the DH Debtors and has been assigned Case No. 12-36728 (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, each of the Debtors remains 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

(7)  The DH 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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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 the Plan Debtors believe they may be unable to secure acceptance of the Plan within the Exclusive Solicitation Period, the Plan Debtors 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 or Dynegy, only DH (or Persons authorized by DH) and Dynegy (or Persons authorized by Dynegy) shall be entitled to file and solicit a plan of reorganization in its respective Chapter 11 Case.

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 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 entitled to vote to accept or reject the Plan to satisfy the requirements of section 1125 of the Bankruptcy Code in connection with the Plan Debtors’ solicitation of votes on the Plan.

C.                                    Confirmation of a Plan of Reorganization

A bankruptcy court may confirm a plan if it independently determines that the requirements of section 1129 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 Debtors believe that the Plan satisfies all the applicable requirements of section 1129 of the Bankruptcy Code.

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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, and Class 4 — Convenience Claims are unimpaired classes and are therefore deemed to have accepted the Plan.  Class 5 — Securities Claims and Class 6 — Equity Interests are not entitled to distributions under the Plan and are therefore deemed to have rejected the Plan.  Accordingly, except as otherwise described herein (and specifically, in the next paragraph), only holders of Class 3 — General Unsecured Claims are entitled to vote on the Plan.

If a controversy arises as to whether any Claim or Equity Interest, or any class of Claims or Equity Interests, is impaired under the Plan, the Bankruptcy Court shall determine such controversy at the Confirmation Hearing.  Prior to the determination by the Bankruptcy Court with respect to any such controversy, each holder of a Claim or Equity Interest within the class of Claims or Equity Interests with respect to which such controversy has arisen may be provided a provisional ballot to cast a vote to accept or reject the Plan pursuant to the procedures approved by the Bankruptcy Court in the Disclosure Statement Orders.  In addition, pursuant to the Disclosure Statement Orders, each holder of a Claim against Dynegy will receive a provisional ballot (the “DI Provisional Ballots”) and each stakeholder of Dynegy (collectively, the “DI Stakeholders”) will be able to request a DI Provisional Ballot if it believes that it is the holder of a Class 3 — General Unsecured Claim and eligible to vote to accept or reject the Plan.(8)

In general, a bankruptcy court also may confirm a plan of reorganization even though fewer than all the classes of impaired claims against and equity interests in a debtor accept such plan.  For a plan of reorganization to be confirmed, despite its rejection by a class of impaired claims or equity interests, the plan must be accepted (to the extent there exists a class of impaired claims) by at least one class of impaired claims (determined without counting the vote of insiders) and the proponent of the plan must show, among other things, that the plan does not “discriminate unfairly” and that the plan is “fair and equitable” with respect to each impaired class of claims or equity interests that has not accepted the plan.  See “Confirmation and Consummation Procedures — Cramdown.”  The Plan has been structured so that it will satisfy the foregoing requirements as to any class of Claims or Equity Interests that is deemed to reject the Plan, and can therefore be confirmed over the deemed rejection of such classes.

(8)  In addition, any Person that files a valid, timely proof of claim evidencing a Class 3 — General Unsecured Claims prior to the bar date established in Dynegy’s Chapter 11 Case will automatically be sent a DI Provisional Ballot.

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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, the Plan is not for all of the Debtors in these Chapter 11 Cases, but for DH and Dynegy only.

The Plan contemplates that on or prior to the Effective Date, DH will be merged with and into Dynegy, with Dynegy being the Surviving Entity (the “Merger”).  The Surviving Entity will then emerge on the Effective Date as Reorganized Dynegy.  As such, the Plan provides for the treatment of Claims against and Equity Interests in the Surviving Entity pursuant to the Merger, as compared to DH and Dynegy separately.

The Plan substantially amends the Second Amended Chapter 11 Plan of Reorganization for Dynegy Holdings, LLC Proposed by Dynegy Holdings, LLC and Dynegy Inc. (the “Second Amended Plan”) filed on March 6, 2012.  The Plan, as amended, represents the culmination of extensive negotiations during the Bankruptcy Court-ordered mediation which began on March 16, 2012 (the “Mediation”) between the Plan Debtors and all of DH’s major creditor constituencies, including (i) the Consenting Senior Noteholders, (ii) the Consenting Lease Certificate Holders, (iii) the Consenting Subordinated Noteholders and (iv) the PSEG Entities (collectively, the “Supporting Creditors”), as well as the Indenture Trustees and the Creditors’ Committee, which resulted in the Settlement Agreement (as defined below and further explained herein).  Importantly, pursuant to and subject to the terms of that certain amended and restated plan support agreement, dated as of May 30, 2012 (which amended and restated the Original Plan Support Agreement, as defined below) (the “Plan Support Agreement”), by and among the Plan Debtors, certain of their Affiliates, and the Supporting Creditors, each of the Supporting Creditors has agreed to support and vote in favor of the Plan.  See “The Reorganization Cases — Plan Support Agreement.”

The Plan is premised upon, and incorporates by reference, that certain amended and restated settlement agreement, dated as of May 30, 2012 (the “Settlement Agreement”), attached hereto at Exhibit “H”, by and among Dynegy, DGIN, Dynegy Coal Holdco, LLC, each of the DH Debtors, the Consenting Senior Noteholders, the Consenting Subordinated Noteholders, the PSEG Entities, the Lease Trustee, and the Subordinated Notes Indenture Trustee(9) (collectively, the “Settlement Parties”), as further described in the section of this Disclosure Statement entitled “The Reorganization Cases — Settlement Agreement,” and which was approved by the Bankruptcy Court on June 1, 2012.  Notably, pursuant to the Settlement Agreement, the Settlement Parties agreed to, among other things, (i) settle certain disputes and mutually release certain Claims and Causes of Action, including those arising in connection with the Prepetition Lawsuits, the Adversary Proceeding (as defined below), and the Intercompany Receivable (as defined herein), (ii) transfer the DCH Membership Interests (as defined below) from Dynegy to

(9)  The Subordinated Notes Indentures Trustee has agreed to the terms of the Settlement Agreement solely with respect to certain provisions of the Settlement Agreement as specified therein.

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DH (directly or indirectly by transfer to DGIN), (iii) in consideration for such transfer and Dynegy’s other covenants and agreements as set forth in the Settlement Agreement and Plan Support Agreement, provide Dynegy with an Allowed Administrative Expense Claim against DH in an unliquidated amount (the “Dynegy Administrative Claim”) and dismiss with prejudice the Prepetition Lawsuits and the Adversary Proceeding, (iv) provide the Subordinated Notes Indenture Trustee, for the benefit of holders of Subordinated Notes Claims, with an Allowed subordinated unsecured claim in the amount of approximately $222.5 million on account of outstanding principal and interest and, for purposes of treatment of and distribution on such allowed subordinated unsecured claim under the Plan, provide the Subordinated Notes Indenture Trustee with an Allowed General Unsecured Claim in the aggregate amount of $55 million (which claim is not subject to subordination) in full satisfaction of all Subordinated Notes Claims, (v) pursue a sale of the Dynegy Roseton and Dynegy Danskammer(10) power generation facilities, including all of the power generation units and other structures and equipment, the related land and all other assets related to the operation thereof (the “Facilities Sale”), and (vi) allocate a portion of the proceeds of the Facilities Sale to DH for distribution to holders of Allowed General Unsecured Claims (the “Allocated Facilities Sale Proceeds”).  The effective date of the Settlement Agreement (the “Settlement Effective Date”) occurred on June 5, 2012.

As described above, this Disclosure Statement and the Plan are only for DH and Dynegy.  The other Debtors in the DH Chapter 11 Cases, Dynegy Danskammer, Dynegy Roseton, Hudson Power, and DNE (the “Operating Debtors”) are not parties to the Plan.  These Debtors operate the Facilities, including the Leased Facilities (each as defined below).  As described in the section of this Disclosure Statement entitled “The Reorganization Cases — Settlement Agreement”, the Settlement Agreement contemplates the sale of the Facilities through the Facilities Sale.  The DH Debtors have begun the early stages of this sale process, and in the event of a successful Facilities Sale, such sale may be consummated through a chapter 11 plan of reorganization for some or all of the Operating Debtors. It is possible, however, that the contemplated Facilities Sale will (a) yield (i) a purchaser that does not want to consummate the Facilities Sale through a chapter 11 plan of reorganization for the Operating Debtors, and instead wants to complete the sale pursuant to section 363 of the Bankruptcy Code, or (ii) insufficient proceeds to confirm a chapter 11 plan of reorganization for the Operating Debtors; or (b) be unsuccessful in identifying a purchaser.  If any of the foregoing occurs, the Facilities Sale will likely not be approved in connection with a chapter 11 plan of reorganization for the Operating Debtors.  Moreover, if the Facilities Sale is not successful, or is not implemented through a chapter 11 plan of reorganization, the Operating Debtors may or may not be able to seek approval of a chapter 11 plan of reorganization, and may be required to liquidate their remaining assets or convert their cases to chapter 7.  As described in the section of this Disclosure Statement entitled “The Reorganization Cases — Business Operations — Intercompany Funding”, the Operating Debtors are the borrowers under the Intercompany Credit Facility (as defined below) provided by DH.  The Intercompany Credit Facility is currently set to expire on August 3, 2012, and it is unclear whether the Operating Debtors will be able to support their operations without further borrowings after that date.

(10)  For the avoidance of doubt, the Plan is not for Dynegy Danskammer, Dynegy Roseton, DNE, and Hudson Power.

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In addition to the Allocated Facilities Sale Proceeds obtained through the Facilities Sale, if any, the Plan provides for the distribution to holders of Allowed General Unsecured Claims of their Pro Rata Share of (i) 99% of the shares of common stock, subject to dilution, to be issued or reserved for issuance by Reorganized Dynegy on or after the Effective Date pursuant to the Plan (the “Reorganized Dynegy Common Stock”) and (ii) $200 million in Cash pursuant to the Plan Cash Payment.  The Plan also provides for the distribution to the beneficial holder or holders of the Dynegy Administrative Claim of 1% of the Reorganized Dynegy Common Stock and warrants to purchase, at any time prior to the fifth (5th) anniversary of the Effective Date, an aggregate of 13.5% of the fully-diluted Reorganized Dynegy Common Stock to be outstanding immediately following the Effective Date, for an exercise price determined based on a net equity value of Reorganized Dynegy of $4 billion, and containing customary anti-dilution adjustments (the “Warrants”), which distribution shall be in full satisfaction of the Dynegy Administrative Claim.  The Plan contemplates that the Dynegy Administrative Claim will be placed in a trust by Dynegy prior to the effective time of the Merger (the “Merger Effective Time”), and on June 18, 2012, the Plan Debtors moved the Bankruptcy Court for authorization to, among other things, complete such a transfer, and on July 10, 2012 the Bankruptcy Court entered an order authorizing such transfer and the Merger (the “Merger Order”) [DH Docket No. 859/Dynegy Docket No. 19].  Pursuant to the Merger Order, Dynegy may not transfer the Dynegy Administrative Claim to a trust without the prior written consent of the Creditors’ Committee.

The Plan substantially modifies the recoveries and rights of holders of General Unsecured Claims from those set forth in the Second Amended Plan.  Specifically, instead of providing a combination of new notes, preferred stock and cash, the Plan, among other things, provides holders of Allowed General Unsecured Claims with the treatment described in the preceding paragraph, and also will permit certain holders of General Unsecured Claims to participate in the selection of the new board of directors of Reorganized Dynegy.(11)  The Plan Debtors believe that the Plan enables holders of Claims to realize the best recoveries under the present circumstances.  Accordingly, the Plan Debtors urge holders of Claims entitled to vote on the Plan to vote to accept the Plan.  The Supporting Creditors, who hold in the aggregate over $2.6 billion of the estimated approximately $4.2 billion of Class 3 — General Unsecured Claims, have each agreed, subject to the terms and conditions contained in the Plan Support Agreement, to vote to accept the Plan.  See “The Reorganization Cases — Plan 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.”

The Merger to be effected pursuant to the Plan was contemplated as part of the Settlement Agreement approved by the Bankruptcy Court.  The Merger represents the most efficient solution for maximizing the distributable value available to creditors of the Plan Debtors. As a result of the Merger, any Claims and/or Causes of Action (including any intercompany claims among the entities and any possible causes of action under sections 544, 545, 547, 548, 549 and 553 under the Bankruptcy Code) between Dynegy and DH will be fully eliminated, waived, released and/or discharged, and satisfied in full, thereby preventing the

(11)  The new board of directors of Reorganized Dynegy shall be selected in a manner to be agreed to among the Majority Consenting Senior Noteholders, the Lease Trustee, and the Creditors’ Committee.

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accrual of future costs associated with contentious, protracted litigation.  In addition, any remaining value of Dynegy will be made available for distributions to holders of Allowed Claims, providing additional distributable value under the Plan.  The Merger will also provide the Estate with (a) certain tax benefits, (b) Cash currently in possession of Dynegy remaining at the time of the Merger, and (c) savings associated with keeping the current senior secured financing at DH’s operating subsidiaries intact.  In addition, the Merger will likely bring operating efficiencies that could potentially be lost if the two entities were not both reorganized.  In point of fact, all of the various financial information attached to or found in this Disclosure Statement — the Projections, Liquidation Analysis, the Valuation, the estimated creditor recoveries, the risk factors, and myriad other financial and operational description and data — assume a merged entity, because that is the path which the Plan Debtors currently believe maximizes value.  The Plan Debtors also believe that the Merger will provide the best and most expeditious path through chapter 11 which will inure to the benefit of the estates of both entities.

The Plan Debtors believe that the Merger is consistent with section 1123(a)(5)(C) of the Bankruptcy Code, which expressly contemplates that a plan may provide for the merger or consolidation of the debtor with one or more parties.  The Merger will effect an actual consolidation under and in accordance with Delaware law.  Nothing in the Bankruptcy Code prohibits such a statutory consolidation, nor does controlling case law impose any additional standards beyond those contained in Section 18-209 of the Delaware Limited Liability Company Act and Section 264 of the Delaware General Corporation Law.  In the UST Objection to the Merger Motion (both as defined and described below), the United States Trustee raised the question of whether the Merger is similar to the substantive consolidation of two or more debtors, and whether the standard for substantive consolidation could be satisfied in connection with the Merger.  However, unlike the proposed Merger (which has been authorized by the Bankruptcy Court pursuant to the Merger Order), substantive consolidation is an equitable remedy provided to creditors.  The Plan Debtors are in fact entering into the Merger pursuant to applicable Delaware law and provisions of the Bankruptcy Code, and not as an equitable remedy.  Thus, the Plan Debtors believe that the principle of substantive consolidation is not at issue in these cases, and the relevant substantive consolidation standard is inapplicable to the Merger; in effect, the Plan Debtors, by way of the Merger, are seeking “actual consolidation” rather than “substantive consolidation”.

Nevertheless, and in an abundance of caution, the Plan Debtors would note that in order to show in the Second Circuit that substantive consolidation is warranted, a party must demonstrate one of the following: (i) that creditors dealt with the entities as a single economic unit and did not rely on their separate identities in extending credit, or (ii) that the operational and financial affairs of the entities are so entangled that the accurate identification and allocation of assets and liabilities would be impossible or prohibitively expensive.  See Union Sav. Bank v. Augie/Restivo Banking Co. (In re Augie/Restivo Baking Co.), 860 F.2d 515, 518 (2d Cir. 1988).  For the reasons provided herein, the Plan Debtors strongly believe that such standard is not applicable to these cases or the Merger, and would vigorously oppose its application with respect to the Merger.  Moreover, as discussed above, the Bankruptcy Court has already authorized the Merger pursuant to the terms of the Merger Order.

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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.

·                                          As noted above, on or prior to the Effective Date, DH will be merged, pursuant to the Merger, with and into Dynegy, with Dynegy being the Surviving Entity.  Such Merger shall be pursuant to documentation that is in form and substance reasonably acceptable to Dynegy, DH, the Creditors’ Committee, the Majority Consenting Senior Noteholders, and the Lease Trustee.  By virtue of the Merger, all Equity Interests in DH issued and outstanding immediately prior to the Merger Effective Time will be cancelled.

·                                          The Plan provides for the treatment of Claims against and Equity Interests in the Surviving Entity pursuant to the Merger.  In particular, Class 1 — Priority Claims, Class 2 — Secured Claims, and Class 4 — Convenience Claims are all unimpaired, whereas only Class 5 — Securities Claims and Class 6 — Equity Interests (both of which are not entitled to distributions under the Plan) and Class 3 — General Unsecured Claims are impaired under the Plan.

·                                          The Plan provides that each holder of an Allowed General Unsecured Claim against the Surviving Entity shall receive its Pro Rata Share of (a) 99% of the Reorganized Dynegy Common Stock (subject to dilution by any options, restricted stock or other Equity Interests issued as equity compensation to officers, employees or directors of the Surviving Entity or its Affiliates and the Warrants), (b) the Plan Cash Payment (of $200,000,000), and (c) the Allocated Facilities Sale Proceeds (the amount of which is to be determined); provided, however, that with respect to sub-clause (c), the Lease Trustee (on behalf of itself and the Lease Certificate Holders) shall not receive a Pro Rata distribution of any amounts paid pursuant to (c) in its capacity as holder of the Lease Guaranty Claim.  Further, the Plan contemplates that Reorganized Dynegy will enter into a registration rights agreement with holders of an Allowed Claim that receive a distribution pursuant to the Plan of ten percent (10%) or greater of the Reorganized Dynegy Common Stock.

·                                          Finally, the Plan provides that on the Effective Date, in full satisfaction of the Dynegy Administrative Claim, the beneficial holder or holders of the Dynegy Administrative Claim shall receive (a) 1% of the Reorganized Dynegy Common Stock (subject to dilution by the Warrants and by any options, restricted stock or other Equity Interests issued as equity compensation to officers, employees or directors of Reorganized Dynegy or its Affiliates) and (b) the Warrants.

B.                                    Summary of Treatment Under the Plan

The following chart summarizes the treatment of each class of Claims and Equity Interests under the Plan.  The chart also provides an estimation of Allowed Claims in Class 3 — General Unsecured Claims, which is the sole impaired class receiving distributions under the Plan and entitled to vote on the Plan.  Although every reasonable effort was made to be accurate,

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this projected range of Allowed Class 3 — General Unsecured Claims is only an estimate as of the date of this Disclosure Statement, and may vary from the final amounts Allowed by the Bankruptcy Court.  Reference should be made to the entire Disclosure Statement and the Plan for a complete description of the classification and treatment of Allowed Claims and Equity Interests under the Plan.

CLAIMS NOT CLASSIFIED UNDER THE PLAN

(12)  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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16

CLAIMS AND EQUITY INTERESTS CLASSIFIED UNDER THE PLAN

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(13)  The Allowed amounts of the various issuances of Senior Notes Claims are set forth in Exhibit “B” to the Plan.

(14)  Pursuant to the Amended Stipulated Rejection Order (as defined below), the TIA Claim was Allowed as a General Unsecured Claim in the amount of $110,000,000.

(15)  Pursuant to the Settlement Agreement, the Lease Guaranty Claims were Allowed against DH as a General Unsecured Claims in the aggregate amount of $540,000,000.  As described herein, the total recovery for the Lease Trustee’s claims against the Debtors (including DH) is capped at approximately $571,000,000.

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(16)  Pursuant to the Settlement Agreement, DH agreed to provide the Subordinated Notes Indenture Trustee, for the benefit of holders of Subordinated Notes Claims, with an Allowed subordinated unsecured claim in the amount of approximately $222.5 million on account of outstanding principal and interest and, for purposes of treatment of and distribution on such Allowed subordinated unsecured claim under the Plan, provide the Subordinated Notes Indenture Trustee with an Allowed General Unsecured Claim in the aggregate amount of $55 million (which claim is not subject to subordination) in full satisfaction of all Subordinated Notes Claims.

(17)  The DH Bar Date (as defined below) for claims was February 24, 2012.  As of the DH Bar Date, the Claims Agent received approximately 65 timely filed Proofs of Claim for General Unsecured Claims against DH that totaled, along with the scheduled General Unsecured Claims against DH, approximately $6.5 billion; however, this figure includes the $1.25 billion DH Note which was cancelled pursuant to the Settlement Agreement on the Settlement Effective Date (discussed below).  DH has evaluated the Proofs of Claim and believes that many of the Claims filed are invalid, untimely, duplicative and/or overstated.  DH therefore anticipates that it will file objections to many of the Proofs of Claim.  In addition, as discussed below, an order was entered in Dynegy’s Chapter 11 Case establishing August 1, 2012 as the Dynegy Bar Date (as defined below).   Although the Dynegy Bar Date has not yet occurred, Dynegy expects that it has few creditors holding Claims that could be classified as Allowed Class 3 — General Unsecured Claims (that are not otherwise obligations of one or more of Dynegy’s direct or indirect subsidiaries or that do not relate to the ongoing operations of the Company’s business).  As such, Dynegy expects that the aggregate amount of such unsecured claims will have no material impact on the ultimate outcome of voting or the treatment in Class 3 — General Unsecured Claims under the Plan.  The pro rata recovery for holders of Allowed Class 3 — General Unsecured Claims will necessarily depend on the aggregate amount of such Allowed Claims, but pursuant to the low and high ends of the enterprise valuation prepared by Lazard and attached as Exhibit “G” to this Disclosure Statement, the percentage recovery range based on an estimated aggregate Allowed amount of Class 3 — General Unsecured Claims of approximately $4.2 billion, is between 59% and 89%, before taking into account potential dilution as discussed in the Lazard valuation attached as Exhibit “G”.

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VI.

GENERAL INFORMATION

The discussion below briefly describes Dynegy, DH, as well as the other DH Debtors, and certain of their non-Debtor subsidiaries and affiliates (collectively, with all of Dynegy’s subsidiaries, the “Company”) and their businesses as they exist as of the date of this Disclosure Statement.  Please note that while Dynegy and all of the DH Debtors filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code (and the DH Debtors’ cases are being jointly administered under Case No. 11-38111 (CGM)), the Plan is a plan of reorganization for Dynegy and DH only, and not the other Debtors in these Chapter 11 Cases.

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.

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Please note that this organizational chart does not show all legal entities in the corporate structure, nor does it show the organizational structure of the Company that will be in place following the Merger.(18)

B.                                    Overview of the Company’s Business

Dynegy and DH are holding companies that conduct their business operations through their direct and indirect subsidiaries, including the other Debtors.  The primary business of the Company 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 8,464 megawatts (“MW”) of generating capacity.  The Operating 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.

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.

(18)  The amounts of the Senior Notes and Subordinated Notes provided in the organizational chart below are the principal amounts of such Notes only, and do not reflect accrued interest as of the Petition Date.

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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, directly or indirectly, 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.

Dynegy, DH and the other DH Debtors rely on certain non-Debtor subsidiaries for essential functions.  For example, Dynegy Administrative Services Company, a Delaware corporation, generally manages the segregated cash management systems for Dynegy, DH and their 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.

The following is a description of each of Dynegy, DH and the Operating Debtors.

1.                                       Dynegy Inc.

Dynegy is a holding company that conducts its business operations through its indirect subsidiaries.  Dynegy is the ultimate parent in the Company’s organizational structure, and as such, it is the direct corporate parent of DH, and the indirect corporate parent of each of the other DH Debtors.  As discussed herein, the Company is primarily involved in the production and sale of electric energy, capacity, and ancillary services from sixteen power plants located in six states totaling approximately 11,600 megawatts of generating capacity.  The Company sells electric energy, capacity, and ancillary services on a wholesale basis from its power generation facilities.  The Company’s 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.

Dynegy is publicly traded(19) and is registered with the SEC pursuant to the Securities Exchange Act of 1934, as amended.  The Company prepares its financials on a consolidated basis and, as a public company, such financials and other material information related to the Company’s businesses are available to the public in Dynegy’s latest Form 10-K, Form 10-Q, and other SEC filings.  Dynegy is based in Houston, Texas and incorporated in the State of Delaware.

(19)         Dynegy’s common stock is currently trading under the symbol “DYNIQ” in the over-the-counter market.

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2.                                       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. 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.

As further described above, DH is a holding company that conducts its business operations through its direct and indirect subsidiaries, including the other DH 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 8,464 MW of generating capacity.

3.                                       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.

4.                                       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.

5.                                       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.

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(“PSEG”), an unaffiliated entity.  A further description of Dynegy Danskammer’s operations is set forth below.

6.                                       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.

C.                                    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 PJM, 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.(20)  Their major liabilities consisted of semiannual rent payments to

(20)  One employee, the Managing Director of Plant operations at the Dynegy Danskammer and Dynegy Roseton

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the Owner Lessors under the Lease Documents (as 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.  Because none of the Debtors are currently authorized NYISO market participants/customers,(21) 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 DH Debtors’ obligations under the Danskammer Lease Documents and the Roseton Lease Documents (together, the “Lease Documents”) are significantly burdensome and would impair the DH Debtors’ ability to reorganize absent rejection.  Accordingly, the DH Debtors determined that the rejection of the Lease Documents was an appropriate exercise of their business judgment.  On the DH Petition Date, the DH Debtors filed a Motion Pursuant to section 365 of the Bankruptcy Code and Bankruptcy Rule 6006 for Entry of an Order Authorizing the DH Debtors to Reject the Lease Documents [DH Docket No. 5] (the “Motion to Reject”).  On December 20, 2011, the Bankruptcy Court entered a stipulated order approving the rejection of the Lease Documents [DH Docket No. 227] (the “Stipulated Rejection Order”), which was thereafter amended, and such amended stipulated order was entered by the Bankruptcy Court on December 28, 2011 [DH Docket No. 273] (the “Amended Stipulated Rejection Order” and together with the Stipulated Rejection Order, the “Rejection Orders”).  Further information concerning the Motion to Reject and the Rejection Orders is contained in this Disclosure Statement in the article entitled “The Reorganization Cases.”

In addition, as set forth in the Settlement Agreement (and as further explained in this Disclosure Statement in the article entitled “The Reorganization Cases — Settlement Agreement”), the Debtors have agreed to pursue the Facilities Sale.

D.                                    Events Leading to the Need for Restructuring; the Prepetition Restructurings

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

facilities is employed by Dynegy Operating Company, a non-Debtor Affiliate.

(21)  Each of Dynegy Roseton and Dynegy Danskammer filed new customer applications that are currently pending with NYISO.

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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, the Company 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, 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.

Overall, the Company faced a number of difficult circumstances in the spring of 2011.  Dynegy’s entire senior management team had departed.  See “General Information — Dynegy’s Board of Directors.”  In addition, DH faced a potential near-term covenant default under its then-existing senior secured credit facility, which jeopardized the Company’s ability to continue as a going concern, and projected cash losses over the next four years exceeded $1.5 billion, which losses were attributable largely to the unprofitable leases at the Roseton Facility and Danskammer Facility. Further, the Company’s organizational structure impaired value by constraining operational, financial and transactional flexibility and exposed all of the Company’s assets, operations, and employees to the risk and costs of bankruptcy if a default occurred under any of DH’s debt instruments.

A great deal of effort was exerted to identify and assess potential alternative courses of action that could be pursued to maximize the Company’s flexibility to address leverage and liquidity issues and to preserve the value of their assets.  No alternative was free from risk and many of the alternatives posed an unacceptable risk of value destruction.  Faced with these difficult circumstances, and without any certain solution to be able to rely on, the Company moved cautiously down a path that involved (i) an operational reorganization of the Company to eliminate the regional organizational structure and instead create separate coal-fired power generation and gas-fueled power generation units, to enhance operational, financial and transactional flexibility; (ii) a refinancing of DH’s senior secured credit facility into a separate facility at each of the coal-fired power generation and gas-fueled power generation units, which removed the risk of an imminent liquidity crisis that could have been caused by a debt default, further promoted flexibility and made it possible to shield substantially all of the Company’s operations from bankruptcy; and (iii) positioned the Company to engage in one or more exchange offers that would provide bondholders with greater security and better terms in exchange for a discount.  Along the way, the plan underwent numerous modifications.

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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.  In connection therewith, the Company’s regional organizational structure was eliminated and separate coal-fired power generation and gas-fueled power generation units were created whereby (i) substantially all of Dynegy’s indirect wholly-owned coal-fired power generation facilities were held by Dynegy Midwest Generation, LLC (“Dynegy CoalCo”), (ii) substantially all of Dynegy’s indirect wholly-owned natural gas-fueled power generation facilities were held by 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 held by 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.

Dynegy GasCo and Dynegy CoalCo were 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.  Refinancing Dynegy’s Credit Agreement into the separate CoalCo Credit Facility and GasCo Credit Facility removed the risk of an imminent liquidity crisis that could have resulted from a debt default under the Credit Agreement, promoted flexibility and made it possible to shield substantially all of Dynegy’s operations from bankruptcy.

On September 1, 2011, Dynegy and DGIN entered into a Membership Interest Purchase Agreement (the “Membership Interest Purchase Agreement”) whereby DGIN sold 100% of the outstanding membership interests (the “DCH 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 coincided in timing and amount to the payments of principal and interest that DH is obligated to make under a portion of certain of its Senior Notes (the “Undertaking Agreement”).  The Undertaking Agreement did 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.  The Membership Interest Purchase Agreement contained a purchase price adjustment mechanism, pursuant to which, in the event of a dispute within two years of the date of the Membership Interest Purchase Agreement as to the equity value of Dynegy Coal Holdco, upon written notice of such valuation dispute by either DGIN or Dynegy,

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such equity value was to be determined by final arbitration.  In connection with any such arbitration, in the event the final equity value of Dynegy Coal Holdco, LLC was determined by the arbitrator to be greater than $1.25 billion, Dynegy would be required to provide DGIN with consideration equal to the difference in value, and if determined by the arbitrator to be less than $1.25 billion, DGIN would be required to provide Dynegy with the difference in value.

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 matured in 2027 (the “Assignment”).  The DH Note bore annual interest at a rate of 4.24%, which was 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 guaranteed 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 was retired, cancelled or otherwise forgiven.

Pursuant to the Undertaking Agreement, Dynegy paid DH approximately $22.5 million on December 1, 2011 and approximately $6.7 million on April 15, 2012, and Dynegy Coal HoldCo paid DH approximately $41.6 million on or about June 1, 2012. Pursuant to the Settlement Agreement, the Undertaking Agreement was amended to provide that any future payments required to be made by Dynegy to DH under the Undertaking Agreement (prior to the occurrence of the Settlement Effective Date would instead be made directly by Dynegy Coal Holdco. On the Settlement Effective Date, each of the Undertaking Agreement and the DH Note, and all obligations thereunder, were terminated. For additional information on the Settlement Agreement, see the section of this Disclosure Statement entitled “The Reorganization Cases — Settlement Agreement.”

DH continued to be burdened with a significant debt load, including approximately $3.5 billion in debt securities, and the leases at Dynegy Roseton and Dynegy Danskammer, with respect to which DH also had guaranty obligations.  These liabilities left the Company with substantial financial uncertainty and in need of further restructuring efforts.  Therefore, on September 15, 2011, exchange offers were initiated with respect to DH’s outstanding senior notes and debentures as well as its subordinated notes, pursuant to which Dynegy offered to pay a combination of cash and its own new 10% Senior Secured Notes due 2018 in exchange for the tender of up to $1.25 billion of the outstanding notes.  After being extended several times, the exchange offer was terminated on November 3, 2011 as holders of an insufficient amount of outstanding notes had tendered their notes, and the exchange offer was not consummated.  As discussed below, Dynegy therefore engaged in extensive discussions with certain holders of the Senior Notes and Subordinated Notes with respect to a potential consensual restructuring.  See “General Information — November 2011 Restructuring Support Agreement.”

As discussed below, several state court actions were brought against DH and certain of its non-Debtor affiliates relating to the Prepetition Restructurings.  Among other things, plaintiffs in two such actions, brought in Delaware and New York, sought injunctive relief to attempt to prevent the August Prepetition Restructurings.  Their request was denied, however, by the

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Delaware court, after the court found that the plaintiffs did not establish a reasonable probability of success on the merits of their breach of contract and fraudulent transfer claims (the other action, filed in New York, was stayed in favor of the Delaware action and later discontinued by the New York court).  For a further description of the Prepetition Lawsuits, please see the subsection of this disclosure statement below entitled “General Information — Material Prepetition Lawsuits.”

Pursuant to the Settlement Agreement, the Prepetition Lawsuits were dismissed with prejudice on the Settlement Effective Date, and any potential claims relating to or arising from disputes with respect to, among other things, the matters investigated by the Examiner, including the Prepetition Restructurings, and the Prepetition Lawsuits were released by the parties to the Settlement Agreement.  For more information regarding the Settlement Agreement, see the section of this Disclosure Statement entitled “The Reorganization Cases — Settlement Agreement.”

E.                                      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 Dynegy Gas Investment Holdings, LLC 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 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 so elected by Dynegy GasCo 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.

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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 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 so elected by Dynegy CoalCo 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.

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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 above, 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 bore annual interest at a rate of 4.24%, payable upon the maturity date, September 1, 2027.  Pursuant to the Settlement Agreement, the DH Note was terminated on the Settlement Effective Date.  For additional information on the Settlement Agreement, see the section of this Disclosure Statement entitled “The Reorganization Cases — Settlement Agreement.”

3.                                       Cash Collateralized Letter of Credit Facilities

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 “DH 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 “DH Letter of Credit Facility”).  The letters of credit under the DH 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 DH Debtors’ workers compensation insurance programs, as well as various surety bonds posted in connection with litigation matters.  The DH Letter of Credit Facility is collateralized by an account maintained by Bank of New York Mellon holding the sum of $27,005,346.81, which amount may be withdrawn only in accordance with the DH Letter of Credit Agreement.

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On October 17, 2011, Dynegy and Credit Suisse Cayman entered into a Letter of Credit Reimbursement and Collateral Agreement, dated as of October 17, 2011 (as amended by the First Amendment Agreement to Letter of Credit Reimbursement and Collateral Agreement dated as of May 24, 2012, collectively, the “Dynegy Letter of Credit Agreement”) for a cash collateralized letter of credit facility with a maximum commitment amount of $1,250,000.  Pursuant to the Dynegy Letter of Credit Agreement, Credit Suisse AG, Cayman Islands Branch has issued two letters of credit on behalf of Dynegy in the aggregate amount of $1,235,000 (the “Dynegy Letter of Credit Facility”) to (i) to Texas Tower Limited, C/O Hines Interests Limited Partnership and (ii) the Travelers Indemnity Company, Credit Risk Management.  The Dynegy Letter of Credit Facility is secured by cash deposited in a deposit account maintained at the Bank of New York Mellon holding the aggregate sum of $1,287,528, which amount may be withdrawn solely in accordance with the terms of the Dynegy Letter of Credit Agreement.

4.                                       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;