Akron, Ohio-based FirstEnergy Corp. (NYSE: FE) was served with subpoenas on Tuesday by the U.S. Attorney for the Southern District of Ohio in connection with bribery and money-laundering charges against five men, including the Ohio House Speaker Larry Householder. The company, which was not identified by name, owns two nuclear power plants in Ohio that received a $1 billion bailout from the legislature after a subsidiary of FirstEnergy filed for bankruptcy protection in March of 2018.

The charges against the five claim that they received some $60 million to push through the bailout of FirstEnergy Solutions, which emerged from bankruptcy earlier this year under a new name, Energy Harbor. The now-independent company is also based in Akron and employs some 2,600 people.

FirstEnergy’s stock dropped by more than 26% Wednesday morning and posted a new 52-week low of $22.88, before recovering somewhat to trade at around $25.15.

FirstEnergy Solutions first approached the state’s lawmakers in 2016 to discuss a bailout of the company’s nuclear and coal-fired power plants in 2016. In early 2018, Paul Singer’s Elliott Management and others made a $2.5 billion investment in convertible preferred and common stock that temporarily precluded the bailout. At the end of the third quarter of 2018, Elliott reported that it owned 25 million shares of FirstEnergy’s common stock valued at $930.9 million. The firm sold its entire stake in the utility for $1.07 billion in the third quarter of 2019.

The connection between FirstEnergy and Larry Householder began in early 2017, a short time after Householder used FirstEnergy’s corporate jet to attend the inauguration of Donald Trump. According to the Akron Beacon-Journal, an affidavit filed by the U.S. Attorney, cash began to flow to a dark-money group called Generation Now that was spending heavily to persuade the state legislature to bail out FirstEnergy’s two failing nuclear power plants. FirstEnergy was believed to be the source of the cash, but that has never been established.

For FirstEnergy, which has been trying to exit the merchant power business and return to the status of a regulated utility, the continuing investigation could mean prison time to some of the company’s managers, but the power generator serves too many customers to be wiped out.

As was the case with the bankruptcy filing of PG&E Corp. (NYSE: PCG) in January of 2019, the company likely faces a big fine and a restructuring that will see a new board and new management once the dust settles. If existing shareholders are treated in the same way as PG&E shareholders, they will get a stake in the new company and could be eligible for dividends in a relatively short time (three years in PG&E’s case).

In the noon hour Wednesday, FirstEnergy stock traded at $25.15. The 52-week high is $52.52, and the consensus 12-month price target is $49.32. Shares have traded at about 10 times average daily volume of 4.4 million so far. The company pays an annual dividend of $1.56 (yielding 4.55% at the current price).

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