Southern Montana Electric Generation and Transmission Cooperative says it's about $21.4 million in the red in recent bankruptcy records that provide a comprehensive look at its financial problems.

For some of Southern's members, the recent filing gave the first full look at their wholesale supplier's troubles.

Terry Holzer, manager of the Yellowstone Valley Electric Cooperative, based in Huntley, called the level of debt "massive."

"The question will remain in bankruptcy court whether this entity can remain a viable entity or be dissolved," Holzer said Monday.

The Yellowstone Valley co-op has long accused the umbrella cooperative of operating in secret.

"I didn't know Southern was not paying its bills," Holzer said. "It's not the way to find out what is taking place within your cooperative. You don't find out the full disclosure through bankruptcy," he said.

Southern filed a summary listing its secured and unsecured creditors along with other information in a 54-page document late Friday afternoon in U.S. Bankruptcy Court. Southern said its liabilities exceed its assets by $21.4 million.

The information also indicates that some of Southern's member co-ops that recently guaranteed some of Southern's debt could be on the hook as co-debtors.

Southern filed for bankruptcy on Oct. 21, seeking to reorganize under Chapter 11.

A creditors' meeting with Southern is set for Nov. 17 in bankruptcy court in Billings. Creditors will be able to question Southern officials, who will be answering under oath.

Southern is a Billings-based wholesale power cooperative that supplies electricity to its members and others. Southern primarily buys power from other companies but also recently completed Phase I of its Highwood Generating Station, an $85 million, 40-megawatt natural gas plant outside Great Falls.

Southern's members include five rural distribution cooperatives and the City of Great Falls. In addition to Yellowstone Valley co-op, the other cooperatives include Beartooth in Red Lodge, Mid-Yellowstone in Hysham, Tongue River in Ashland and Fergus in Lewistown.

Neither Southern's manager, Tim Gregori, nor its bankruptcy attorney, Malcolm Goodrich of Billings, returned calls seeking comment on Monday.

In another blow to Southern, Standard and Poor's, one of three U.S. bond rating agencies, recently lowered Southern's bond rating from BBB to CC. The CC suggests that the company is "currently highly vulnerable." At BBB, Southern had "adequate capacity to meet its financial commitments."

Southern had been trying to finance expansion of the Highwood plant to 120 megawatts and had been authorized by its board to borrow up to $300 million.

Southern listed total assets of $110.4 million, which includes real and personal property.

Southern's real property is 446 acres in Cascade County where the Highwood plant and a substation are located. The cooperative's personal property includes various bank accounts and security deposits, office equipment and other items, including $4.7 million in accounts receivable.

Southern listed its total liabilities at $131.8 million.

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The liabilities include $91.4 million to creditors holding secured claims, $53,566 to creditors with unsecured priority claims and $40.3 million in creditors with unsecured, non-priority claims.

Southern initially had listed debt of $21 million to its top 20 unsecured creditors.

Creditors with secured claims have debt backed by Southern's assets. Those claims are restructured and are among those paid first. Creditors with unsecured claims generally negotiate payments and get paid after secured and priority claims.

Among the secured creditors is Prudential Capital Group of Dallas, which loaned Southern money for the Highwood plant. Prudential's mortgage listed at $75 million. Another mortgage holder is Modern Woodman of America, in Rock Island, Ill., with a $10 million claim.

Southern also owes its employees, including Gregori. Gregori is owed $25,365, including $11,725 as a priority claim.

Southern owes money in unsecured claims to about 39 businesses that mostly are associated with construction or service for the Highwood plant or are power suppliers, such as PPL Energy Plus, which is Southern's main power provider. The PPL Energy Plus claim is $7.5 million, which is disputed.

All of Southern's members are listed as unsecured creditors for deposits on wholesale power bills, their investments in Highwood and other claims.

And all of Southern's members, excluding Yellowstone Valley, also are identified as co-debtors for pledging collateral or guaranteeing letters of credit.

Yellowstone Valley has refused to guarantee Southern's debt.

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Contact Clair Johnson at cjohnson@billingsgazette.com or 657-1282.