Several related small coal producers in eastern Kentucky asked their bankruptcy court on March 13 for approval of a proposed sale of their equipment, with other assets to go up for bid at a March 19 auction.
The motion, filed at the U.S. Bankruptcy Court for the Eastern District of Kentucky, was from Licking River Mining LLC, Licking River Resources Inc., S. M. & J. Inc., Fox Knob Coal Co. Inc., J.A.D. Coal Co. Inc., U.S. Coal Corp., Harlan County Mining LLC, Oak Hill Coal Inc., Sandlick Coal Co. LLC, and U.S. Coal Marketing LLC. They asked for an order authorizing Debtors Licking River Resources, Licking River Mining, Oak Hill Coal and S. M. & J. to sell substantially all of their assets free and clear of liens, claims, interests, and encumbrances. The companies would prior to that assume all leases and contracts they want to sell.
The companies were forced by creditors into involuntary Chapter 11 protection in May and June of last year. The court on Feb. 20 approved bidding procedures and related deadlines, and scheduled a sale hearing for March 31. Bids were subsequently taken.
“The Debtors, in consultation with the Consulting Parties, reviewed each of the Qualified Bids received by the Initial Bid Deadline and determined in their business judgment that the Bid submitted by Hackman Capital Acquisition Company, LLC and Hilco Industrial, LLC or their assignees or nominees (the ‘Proposed Buyer’) represents the current ‘highest and best’ offer to purchase that certain equipment owned by the Licking River Debtors that is listed on Exhibit A attached hereto (the ‘Licking River Equipment’), which is substantially all of the equipment assets of the Licking River Debtors,” the March 13 motion said. The proposed purchase price is $8.5 million in cash to be paid at closing.
The companies added: “Although the Debtors are not appointing an Initial Bid for the Licking River Debtors’ assets aside from the Licking River Equipment (including, but not limited to, leases, bonds, real property, and contracts) at this time, the Debtors are still considering bids received from various Qualified Bidders with respect to such assets. The Debtors expressly reserve the right to seek bids on any and all of the Licking River Debtors’ assets at the Auction to be held on March 19, 2015 (as described below) and to seek to authorize the sale of such assets at the Sale Hearing (as defined below) by supplementing and/or amending this Motion. For the purpose of clarity, in addition to seeking approval to sell the Licking River Equipment, this Motion also seeks approval for the Licking River Debtors to sell substantially all of their other assets to the highest and best bidder on such terms as will be determined at the Auction discussed herein below. However, the Debtors are under no obligation to accept a bid on or sell any assets, and as such, the Debtors reserve all rights to decline any offer on any assets in consultation with the Consulting Parties if the Debtors deem any bid or offer to be inadequate for any reason.
“By this Motion, and as required by the Bidding Procedures, the Debtors are providing notice to all creditors and parties in interest of: (a) the Licking River Equipment proposed to be transferred to the Proposed Buyer and the material terms of the contemplated sale transaction; and (b) the Licking River Debtors’ intention to seek approval of a sale of all of the Licking River Debtors’ other assets on such terms as may be negotiated at the Auction.”