Three creditors of several related coal companies in bankruptcy, including J.A.D. Coal, filed Feb. 9 notices with the bankruptcy court of their intent to credit bid for assets of the companies that are about to go up for auction.
Under bankruptcy rules, a creditor can use the amount of money it is owed as a credit bid in an asset auction, which in most cases blocks out any bid from outside party for that asset.
- “Secured Creditor, Commercial Bank, serves this Notice of Intent to Credit Bid in compliance with the Order Approving Bidding Procedures (DN 817) in connection with the assets of Debtor, JAD Coal Company, Inc.,” said one notice. “Commercial Bank hereby provides notice of its intent to exercise its right to credit bid up to $200,000 on the Thin Strata Cutter Head #1105 (listed as Cutter Module for SHM 64 Highwall Miner on Notice of Assets Subject to Sale, DN 840).”
- Caterpillar Financial Services also gave notice of its intent to credit bid to acquire three pieces of mining equipment which are assets of J.A.D. Coal.
- Komatsu Financial LP also gave notice of its right to bid its secured claim, or any portion thereof, to purchase all or any portion of its collateral owned by J.A.D. Coal, which includes several pieces of mining equipment.
In May and June 2014, involuntary Chapter 11 petitions were filed against various related companies, including Licking River Mining LLC, Licking River Resources Inc., Fox Knob Coal Inc., S.M. & J. Inc., J.A.D. Coal, Sandlick Coal Co. LLC and U.S. Coal Marketing LLC. The petitions were filed in the U.S. Bankruptcy Court for the Eastern District of Kentucky.
These notices result from a Jan. 7 court order approving an auction procedure and schedule. The sale hearing to consider the sale of substantially all of the JAD Debtors’ assets, including assumption and assignment of contracts and leases, is to be held on Feb. 27 in the court building in Lexington, Kentucky. The “Assets” to be sold consist of substantially all assets, real, personal, mixed, tangible and intangible, connected with the going-concern operations of the JAD Debtors’ coal mining business.
U.S. Coal, the parent of each of the debtors, was formed in 2006 for the purpose of acquiring and consolidating several smaller coal operations and taking advantage of perceived arbitrage opportunities between private and public market valuations through an anticipated initial public offering. U.S. Coal’s operations are located in Central Appalachia in eastern Kentucky.