On September 21, 2023, the Federal Energy Regulatory Commission (FERC) established an affiliation between J.P. Morgan Investment Management Inc. (J.P. Morgan Investment) and the Mankato Energy Center, LLC, along with Mankato Energy Center II, LLC (collectively referred to as the Mankato Companies).
The Commission arrived at this decision after identifying that the upstream owner of the Mankato Companies, IIF US Holding 2 LP (IIF US Holding 2), generated an environment that starkly lacked arm’s-length bargaining when engaging in transactions with J.P. Morgan Investment. This particular detail has drastically affected the overall judgment.
While reaching this conclusion, FERC considered several factors, one of them being the amount of power that IIF US Holding 2 had delegated. However, it remains unclear exactly what aspects of the power delegation influenced FERC’s verdict.
For corporate counsel and law firms working closely with large corporations, this development serves as a crucial reminder of how regulation agencies assess corporate relationships when determining whether an affiliation exists between different entities. More specifically, the absence of arm’s-length interactions between entities is a key focus area.
For more detail, refer to the original report, which is available at: jdsupra.com/legalnews/ferc-finds-affiliation-between-j-p-3992607/.