No Ruling Thursday; Wyoming Coal Mines’ Future Remains in Limbo
The future of two Wyoming coal mines and the hundreds of workers who are employed there will remain in limbo for another day.
In a motion filed early Thursday, attorneys for Blackjewel LLC asked a judge to approve Contura Energy, Inc. as a 'stalking horse bidder' as the company moves to sell off its assets and avoid a costly Chapter 7 liquidation. Having failed to secure debtor-in-possession financing to continue as a going concern, Blackjewel now looks to sell its holdings for as much money as possible and repay its creditors.
A federal bankruptcy court judge continued the hearing until Friday morning.
"Critically, Contura has agreed to fund a cash deposit toward the purchase price under the Stalking Horse Sale immediately... and to allow [Blackjewel] to use this deposit to pay anticipated expenses through the conclusion of an expedited, but efficient sale process for substantially all of their assets," the motion states.
Contura operated the Eagle Butte and Belle Ayr mines until 2017 when it sold them to Blackjewel. Contura still owes $250 in reclamation costs.
The cash deposit in the amount of $8.1 million would be applied to the purchase price of the assets. Blackjewel would return the money should Contura be outbid.
Blackjewel Attorney Stephen Lerner said Contura is the only company that has shown willingness to finance Blackjewel's assets.
"Even under the tight timeframe, every conceivable party that might have an interest has been reached out to," Lerner said.
Blackjewel could be sold as a whole entity, or multiple companies could bid on specific operations. Bids will be accepted until July 31. If there is more than one qualifying bid, an auction will be held on August 1.
The funding will only be repaid if Contura is outbid or if the court does not approve the sale.
Several Blackjewel stakeholders objected to the proposed sale process.
U.S. Attorney Fred Westfall objected to the sale and said it could potentially let Blackjewel off the hook for $47 million in unpaid federal minerals taxes.
"We've been operating in the dark," Westfall said. "This defeats the regulatory process."
The hearing concluded before Judge Frank Volk reached a decision. It will resume at 8:30 a.m. MST Friday.
If Volk doesn't approve the sale, Lerner said Blackjewel will be forced to liquidate its assets.
Lerner said Blackjewel's underground mines in Appalachia would begin flooding "within hours," if the judge didn't approve the sale.
"We'll be out of financing by the end of business today," Lerner said before the hearing concluded.