New interim trustee named in bankruptcy of coal operator Larry Addington

The U.S. Bankruptcy Court for the Eastern District of Kentucky issued a June 21 notice that Robert Brown has been approved as the Chapter 7 interim trustee for the bankruptcy estates of coal operator Larry Addington and various companies that he does business under, including Addington Enterprises and Big Sandy Coal Sales LLC.

Among Brown’s duties will be to preside at meetings of Addington creditors. If at their next meeting the creditors don’t reject Brown, he will automatically get “interim” removed from his title and be the permanent trustee. Samuel Crocker, the U.S. Trustee for this court (which is separate from Brown’s new job), had reported in a June 20 filing that Brown was elected by creditors at a June 19 meeting. Both Brown and Mark Miller had been up for the interim job at the June 19 creditors meeting, but Brown won the vote.

The parties asking for appointment of a Chapter 7 trustee included unsecured creditors Caterpillar Financial Services Corp. (with a $7.5m claim against the estates), PNC Equipment Financing LLC ($3.8m claim) and GATX Corp. ($2.9m claim). Another creditor seeking this appointment was the Liquidating Trustee of the Creditors Trust ($2.5m claim) for another Addington company, Appalachian Fuels LLC, that went bankrupt in this same court in 2009.

One issue at that June 19 creditors meeting was which party had what claims, which went to the issue of establishing a voting quorum of creditors. For example: “Caterpillar and the App Fuels Trust objected to the United States Trustee’s inclusion of the claim of Travelers Casualty & Surety (Claim 9-1, amended by claim 9-2, in the Claims Register) in the quorum calculation, because the claim is classified in the supporting documents as contingent and unliquidated, except for a liquidated balance of $45,775.69,” Crocker noted. “The total amended claim amount is $16,299,872.60, so the objection is to the inclusion of the $16,254,096.91 portion of the claim that is contingent and unliquidated in the calculation of the quorum.”

Brown, who filed a June 20 notice with the court that he accepts this appointment, can be reached at: WYATT, TARRANT & COMBS LLP, 250 West Main Street, Suite 1600, Lexington, Ky. 40507. Tel: 859-233-2012, Fax: 859-259-0649, Lexbankruptcy@wyattfirm.com.

Addington, one of the most prominent coal producers in the eastern U.S. over the last 30 years, filed for Chapter 11 protection in January, with that case converted to Chapter 7 in May. His lawyers said the problem was that in recent years he had signed mine equipment lease guarantees and that the companies holding those guarantees had come after him for what was due.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.