Samuel Crocker, the United States Trustee overseeing the bankruptcy cases of Licking River Mining LLC and related coal companies, on April 3 asked the U.S. Bankruptcy Court for the Eastern District of Kentucky to convert these cases from Chapter 11 protection to Chapter 7 dissolution.
This motion will be heard by the court at an April 8 hearing. These coal companies were forced into Chapter 11 in May and June of last year by creditors.
Said Crocker in the April 3 request: “The United States Trustee has learned from conversations with parties in interest, and from representations made on the record at the March 31, 2015 Status Hearing, that both the CEO and CFO have left the Debtor companies. The Debtors’ officers, who were most actively involved in these cases on the record, have left the companies and operations have been turned over to a non-insider employee, Controller Erin Gabbert.”
He also wrote: “Since filing the above-captioned cases, the Debtors have suffered substantial continuing losses and diminution of the estates. The Monthly Operating Reports filed in these cases reflect that the Debtors have operated at a loss of over $1m per month for the majority of months the cases have been in bankruptcy. Given these losses, the Debtors cannot reasonably be expected to successfully emerge from bankruptcy. The Debtors acknowledged this at the March 31, 2015 Status Hearing, stating on the record that there was very little likelihood of a Plan of Reorganization being formulated in the Licking River division of the Debtors’ operations. The Exhibit (Doc. 1131) passed around by the Debtors at the Status Hearing reflect that the Debtors as a whole are administratively insolvent based on the offers received through the bidding processes.”