"The deadline for the filing of proofs of claim against the Debtors has been established by the Bankruptcy Court as September 22, 2014 at 5:00 p.m. (prevailing Eastern Time) for the General Bar Date; and October 6, 2014 at 5:00 p.m. (prevailing Eastern Time) for the Government Bar Date."
The Form 8-K released today:
"On August 29, 2014, the Sellers completed the sale of their Hazard (excluding Laurel Mountain), West Virginia and Indiana assets (the “Assets”) to Blackhawk pursuant to the Amended Agreement. The consideration for the Assets was $52.0 million, consisting of (i) $20.0 million in cash paid to the Sellers, (ii) a third lien secured promissory note in the amount of $27.0 million delivered to the Sellers, and (iii) a second lien secured promissory note in the amount of $5.0 million delivered to one of the Sellers’ lessors, in lieu of a cash payment of cure costs under certain leases to be assumed by the Sellers and assigned to Blackhawk in connection with the sale."Also important:
"Mr. Murphy will serve as CRO until the earlier of the tenth business day following the confirmation of a chapter 11 plan or, the first business day following written notice of termination of the Consulting Agreement. Pursuant to the Consulting Agreement, the Company will pay to Byron Advisors a monthly fee of $60,000.00 for Mr. Murphy’s services through January 31, 2015. Thereafter, the monthly fee will be reduced to $30,000 for each month in which Mr. Murphy provides his services to the Company. The Company has also agreed to reimburse Mr. Murphy for all reasonable and necessary out-of-pocket expenses incurred by Mr. Murphy in performance of the services. In addition, Mr. Murphy shall earn transaction fees equal to (a) $150,0000 upon the repayment in full in cash of the Company’s postpetition financing facility (which fee shall be reduced by $50,000 per month for each month after November 30, 2014), and (b) 5% of average recoveries of general unsecured creditors (prior to dilution for this fee), subject to a minimum of $250,000 (provided that general unsecured creditors receive at least $250,000, in the aggregate) and a maximum of $750,000, payable upon the effectiveness of a chapter 11 plan."That's really interesting for several reasons. The CRO gets paid more if he gets the DIP paid off sooner, and his compensation rate declines if he's still working (doesn't have a plan confirmed) by January 2015. He will want to try to wrap this up quickly, but also these deadlines would also have been chosen because they seemed achievable.
From 8-K filing:
Pursuant to the Strategic Transaction Bidding Procedures, the Debtors, in consultation with the agent under the Debtors’ debtor-in-possession financing facility (the “DIP Agent”) and the Unsecured Creditors’ Committee, entered into an Asset Purchase Agreement, dated August 15, 2014 (the “Agreement”) with, JR Acquisition, LLC, a wholly owned subsidiary of Blackhawk Mining LLC (together with JR Acquisition, LLC, “Blackhawk”), and selected the Agreement to serve as a Stalking Horse Bidder for the purchase of the Debtors’ mining complexes commonly referred to as the Hampden Complex (including the assets of Debtor Logan & Kanawha Coal Company, LLC), the Hazard Complex (other than the assets of Debtor Laurel Mountain Resources LLC) and the Triad Complex (collectively, the “Purchased Assets”). The Agreement contemplated that, among other things, Blackhawk would (i) pay to the Debtors $20.0 million in cash and deliver a third lien secured promissory note in the amount of $25.0 million, and (ii) deliver to one of the Debtors’ lessors, in lieu of a cash payment of cure costs under leases to be assumed and assigned to Blackhawk, a second lien secured promissory note in the amount of $5.0 million. A copy of the Agreement is filed herewith as Exhibit 2.1 and is incorporated by reference herein.It looks as though the sale was approved at the hearing today, judging by the docket entry.
In conjunction with the Strategic Transaction Bidding Procedures, the Debtors filed with the Court the Agreement with Blackhawk and then held a previously announced public auction on August 18-21, 2014 to determine whether a higher or better bid (or combination of bids) could be obtained. During the auction process, Blackhawk submitted a bid that, among other things, increased the consideration offered for the Purchased Assets from $50 million plus the assumption of certain liabilities to $52 million plus the assumption of certain liabilities.
On August 21, 2014, the Debtors, in consultation with the DIP Agent and the Unsecured Creditors’ Committee, selected Blackhawk’s revised bid as the winning bid. The revised bid contemplates that Blackhawk will (i) pay to the Debtors $20.0 million in cash and deliver a third lien secured promissory note in the amount of $27.0 million, and (ii) deliver to one of the Debtors’ lessors, in lieu of a cash payment of cure costs under leases to be assumed and assigned to Blackhawk, a second lien secured promissory note in the amount of $5.0 million. The Company will file an amendment to the Agreement reflecting the revised bid in a Current Report on Form 8-K within four business days of the date of the amendment.
The sale is expected to close on or about August 29, 2014 and is subject to customary closing conditions, including Court approval. A Court hearing is scheduled for August 26, 2014 to consider approval of the sale.
This was filed [pdf] on Saturday afternoon. Not a lot of time (0 business days) between it and the auction held today.
Pursuant to the Strategic Transaction Bidding Procedures, the Debtors, in consultation with the DIP Agent and the UCC, have selected JR Acquisition, LLC, a wholly owned subsidiary of Blackhawk Mining LLC, as a Stalking Horse Bidder for the purchase of the Debtors’ mining complexes commonly referred to as the Hampden Complex (including the assets of Debtor Logan & Kanawha Coal Company, LLC), the Hazard Complex (other than the assets of Debtor Laurel Mountain Resources LLC) and the Triad Complex for an aggregate purchase price of $50,000,000 plus the assumption of certain liabilities,Only $50 million, and the bidder does not assume the black lung benefits or workers' compensation benefits that are something like $100 million plus. Blackhawk seems to be a CAPP coal vulture investor.
Section 2.06. Purchase Price; Allocation of Purchase Price. (a) On the terms and subject to the conditions set forth in this Agreement, Buyer shall, on its own behalf and as agent for the relevant Designated Buyers, as consideration for the Purchased Assets, in addition to the assumption by Buyer of the Assumed Liabilities, (i) pay to the Sellers $20 million cash (the “Closing Cash Payment”), (ii) deliver to Kentucky River the Second Lien Note and (ii) deliver to the sellers a third lien secured promissory note in an amount equal to $25 million (the “Third Lien Note” and together with the Closing Cash Payment and the Second Lien Note, the “Base Purchase Price”). The Base Purchase Price shall be subject to adjustment at and after Closing in accordance with Section 2.08 (as adjusted, the “Purchase Price”). The Purchase Price shall be paid as provided in Section 2.11.Not even all cash.
Finally a bidder, although for a paltry amount:
"Bankrupt James River Coal Co., after repeatedly postponing an asset auction, chose a unit of Blackhawk Mining LLC as the lead bidder, with an opening offer of $50 million.Bankruptcy court auctions are set up for the stalking horse bidder to usually win.
The Blackhawk unit will be the so-called stalking horse at the auction to be held today in New York, according to papers filed in U.S. Bankruptcy Court in Richmond, Virginia. A sale hearing to consider Blackhawk’s or other possible bids is scheduled for Aug. 20 in Richmond."
2. Pursuant to the Strategic Transaction Bidding Procedures, the Debtors have determined, in their reasonable judgment and in consultation with the DIP Agent and the UCC, to adjourn the Auction and the Sale Hearing to the following dates:Postponed over and over again. Does nobody want to buy these mines? What are they going to do with them?
(a) Auction: August 18, 2014 at 10:00 a.m. (prevailing Eastern Time), to be held at the offices of counsel to the Debtors, Davis Polk & Wardwell LLP, 450 Lexington Avenue, New York, New York 10017.
(b) Sale Hearing (if the Successful Bid contemplates a Sale): August 20, 2014 at 1:00 p.m. (prevailing Eastern Time), to be held before the Honorable Kevin R. Huennekens, at the United States Bankruptcy Court for the Eastern District of Virginia, 701 East Broad Street, Room 5000, Richmond, Virginia 23219.
From the notice filed on Friday:
Pursuant to the Strategic Transaction Bidding Procedures, the Debtors have determined, in their reasonable judgment and in consultation with the DIP Agent and the UCC, to adjourn the Auction and the Sale Hearing to the following dates:
(a) Auction: August 11, 2014 at 1:00 p.m. (prevailing Eastern Time), to be held at the offices of counsel to the Debtors, Davis Polk & Wardwell LLP, 450 Lexington Avenue, New York, New York 10017.
(b) Sale Hearing (if the Successful Bid contemplates a Sale): Date to be determined.
Haven't checked the docket but saw this news release:
"James River Coal Co.'s asset sale hearing was postponed until a later date, according to a federal court docket. The auction of James River's assets, already delayed multiple times, is expected to be held at a law office in New York. If there is a successful bid, a sale hearing will take place at the U.S. Bankruptcy Court for the Eastern District of Virginia in Richmond. The July 29 notice did not say when the sale hearing would be scheduled."Auction has been rescheduled multiple times, now they aren't even scheduling a new date. I wonder if there is virtually no interest or really no interest at all in these assets? A correspondent writes,
"If they are sold, they will probably be bought by somebody without much of a balance sheet who pays single digit millions I’d bet. No public company will touch them. To buy them, you have to view it as a deep out of the money call option on the export market for thermal coal, and hope for better times a few years from now. Will require a low price."
Wow, no wonder they have to keep postponing the auction, indeed - SNL article:
"But James River also is burdened by a wealth of expiring utility contracts and a sharp decline in coal purchases in 2013 compared to 2012. The biggest blow was Southern Co.'s decision to all but cease coal purchases from Central Appalachia by 2016 and retire units at three older, coal-fired power plants in Georgia.CAPP coal can't compete with PRB coal, which is an order of magnitude more efficient per employee hour.
On a companywide basis, James River was the largest supplier of Central Appalachian coal to Southern plants in 2012, shipping 1.7 million tons to the company. Southern was James River's largest utility customer overall in 2012, and it purchased exclusively Central Appalachian coal from the company.
Based on U.S. Energy Information Administration fuel contract data, nearly 51% of the Central Appalachian coal and about 31% of the total coal delivered to electric utilities by James River in 2012 went to Southern-operated plants. The diminishing number of sales contracts also may limit interest in James River's assets."
Link:
"While Westmoreland Coal Co. is still in the middle of integrating its newly acquired Canadian coal mines purchased from Sherritt International Corp., executives said there is no shortage of companies looking to off-load other coal assets."Is this why the James River Coal bankruptcy auction keeps being postponed? What results would Walter Energy have if they needed to sell a coal asset?
Latest filing.
Pursuant to the Strategic Transaction Bidding Procedures, the Debtors have determined, in their reasonable judgment and in consultation with the DIP Agent and the UCC, to adjourn the Auction and the Sale Hearing to the following dates:Not having much luck marketing the assets, I wonder?
(a) Auction: July 28, 2014 at 1:00 p.m. (prevailing Eastern Time), to be held at the offices of counsel to the Debtors, Davis Polk & Wardwell LLP, 450 Lexington Avenue, New York, New York 10017.
(b) Sale Hearing (if the Successful Bid contemplates a Sale): Date to be determined
"On Tuesday in Manhattan, James River Coal is scheduled to auction itself off at the offices of its bankruptcy counsel, Davis Polk & Wardwell LLP.
Originally scheduled to hold the auction on July 8, James River has been wavering among reorganizing, selling its assets or liquidating."
Headline:
"Severstal is selling its North American coal assets, PBS Coals Inc, to Canada's Corsa Coal Corp for an enterprise value of $140 million. The Moscow-based steelmaker purchased the assets in 2008 for about $1 billion."An 86 percent loss! A correspondent writes,
"This is an ugly benchmark. Enterprise value could be as little as $120 million, depending on how the environmental tail plays out. They produced 3.3mm tons of coal last year and half of it was thermal. No mention of reserves. Those JRCCQ bonds should be trading at a penny after this."
PLEASE TAKE NOTICE that:Are they having trouble getting bids? The stock has been hovering around 30 cents, but the 2015 bond last traded at 2 cents.
1. On May 9, 2014, the United States Bankruptcy Court for the Eastern District of Virginia entered an Order (i) Approving the Strategic Transaction Bidding Procedures, (ii) Scheduling Bid Deadlines and the Auction, (iii) Approving the Form and Manner of Notice Thereof and (iv) Granting Related Relief [ECF No. 254] (the “Strategic Transaction Bidding Procedures Order”)
2. Pursuant to the Strategic Transaction Bidding Procedures, the Debtors have determined, in their reasonable judgment and in consultation with the DIP Agent and the UCC, to adjourn the Auction and the Sale Hearing to the following dates:
(a) Auction: July 14, 2014 at 10:00 a.m. (prevailing Eastern Time), to be held at the offices of counsel to the Debtors, Davis Polk & Wardwell LLP, 450 Lexington Avenue, New York, New York 10017.
(b) Sale Hearing (if the Successful Bid contemplates a Sale): July 17, 2014 at 1:00 p.m. (prevailing Eastern Time), to be held before the Honorable Kevin R. Huennekens, at the United States Bankruptcy Court for the Eastern District of Virginia, 701 East Broad Street, Room 5000, Richmond, Virginia 23219.
Dated: July 3, 2014
Mentioned in the WSJ:
"[W]ill ask Judge Kevin Huennekens of the U.S. Bankruptcy Court in Richmond, Va., for more time to draft a restructuring plan as it continues to weigh whether to reorganize the company or to sell its assets.
James River Coal has asked for permission to file its proposed plan by Nov. 13, an extension of 100 days.
If the extension is approved, James River Coal will have until mid-January to solicit votes on the restructuring plan from creditors. The company noted in its extension request that such a timeline would coincide with the January 12 maturity date of its $110 million bankruptcy loan.
Since seeking Chapter 11 protection in April, James River Coal has been soliciting bidders to either purchase its assets outright or submit the terms of a reorganization plan that would include investment in the company.
An auction and sale hearing, previously scheduled for next week, have been delayed until the week of July 14."
A correspondent writes in with this update,
"Opes is paying James River $3.1 million in cash and is taking on an estimated $6.7 million in liabilities for its part of the complex, while Marshall is paying $445,000 and assuming an estimated $2.2 million in liabilities for the other part. James River said that while the assets aren't currently operational, selling them will save the company more than $1 million per month. James River is set to hold an auction for its other assets on July 8, with formal bids due by June 30."
"[JRCC] received bankruptcy-court approval to either sell its assets at auction or enter into an investment agreement, the foundation of its dual-track restructuring plan.
The rules for the July 8 auction, approved by Judge Kevin R. Huennekens of the U.S. Bankruptcy Court in Richmond, Va., allow bidders to submit offers to purchase James River's assets or submit terms for a restructuring plan, which would include an investment in the company.
Indications of interest are due by May 22. Formal bids are due June 30, according to the approved rules."
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