Trinity Coal, once a major coal producer in Central Appalachia, asked its bankruptcy court on Sept. 4 for an extension of time to win creditor acceptances for a reorganization plan and a disclosure statement that it filed with the court on Aug. 15.
Trinity, bought in 2010 by India-based Essar Minerals, was forced in February into Chapter 11 protection by creditors. The court handling the case is the U.S. Bankruptcy Court for the Eastern District of Kentucky.
Trinity Coal and related companies in bankruptcy are request approval of an order, further extending the period during which they have the exclusive right: to file a plan in these Chapter 11 cases by 45 days, from Sept. 30 to Nov. 14; and to solicit acceptances of such plan by 45 days, from Nov. 29 to Jan. 13, 2014, without prejudice to their right to seek further extensions.
On Aug. 15, the debtors, as joint proponent with Essar, filed the disclosures for a joint plan of reorganization. The hearing to approve the disclosure statement is currently scheduled to occur on Sept. 19, and the debtors anticipate soliciting votes and having a confirmation hearing on the plan by Oct. 17.
Since the current exclusive filing period expires on Sept. 30, they are seeking these further extensions of the exclusive periods to avoid the “risk and distraction” of possible competing Chapter 11 plans during the time period in which they are seeking to have the plan confirmed.
“The Debtors have made significant progress in negotiating and formulating the Plan with the[ debtor in possession] DIP Lenders, Essar and the [unsecured creditors ]Committee, and are in the midst of a process that contemplates confirmation of the Plan by mid-October,” Trinity said.
Trinity Coal’s Aug. 15 plan would, if approved, see its assets turned over to a “Liquidating Trust” that would then sell those assets on the open market. The Liquidating Trust, run by Trinity Coal’s current managers, will be formed to oversee the wind down, dissolution, and liquidation of the trust assets. The trust will have will no objective to continue or engage in the conduct of a trade or business, except to the extent necessary to, and consistent with, the liquidating purpose of the Liquidating Trust.
The Trinity Coal debtors are a group of companies, the first of which, Trinity Parent Corp., wholly owns all of the other companies which are its direct and indirect subsidiaries. These operations are organized into six coal mining complexes, which are:
Deep Water – located in Fayette County, W.Va. The debtors are currently mining coal only at Deep Water, which as of March 1, 2013, had estimated total coal reserves of about 70 million saleable tons and produces high volatile “A” met coal. Approximately 40,000 tons of met coal is mined per month. Deep Water consists of one active surface mine with multiple units, two active highwall miners, and two idle underground mines.
North Springs – is a 16,483-acre site with a well-established infrastructure located in McDowell, Mingo, and Wyoming counties, W.Va. When it was operating, North Springs produced compliance steam coal and high volatile “B” met coal. North Springs controls an estimated 16.1 million tons of coal reserves, most of which is met coal.
Falcon – is located in Boone County, W.Va., and controls an estimated 6.2 million tons of coal reserves. This complex produced low-sulfur steam coal.
Prater Branch – is located in Magoffin and Floyd counties, Ky., and controls an estimated 18.3 million tons of coal reserves. This complex produced lower-sulfur steam coal.
Little Elk – is located in Perry County, Ky., and controls an estimated 11.9 million tons of coal reserves. This complex produced mid-sulfur steam coal.
Levisa Fork – is located in Floyd County, Ky. Coal reserves at Levisa Fork have been depleted and the debtors have been conducting only reclamation activities at the site.