The bankruptcy judge for Alpha Natural Resources on Nov. 24 issued orders extending the coal company’s exclusive deadline to file a reorganization plan and rejecting several agreements, including one related to Don Blankenship, the former head of Massey Energy, which Alpha took over in 2011.
When Alpha entered Chapter 11 protection in August at the U.S. Bankruptcy Court for the Eastern District of Virginia, it was given a routine deadline to file a reorganization plan. But, as is often the case in complex matters like this one, an extension was sought. Prior bankruptcy cases for coal companies have often involved several extensions.
The judge extended the exclusive plan filing deadline to March 30, 2016. That means that no other party, like a creditor, can file a competing plan during that period. The new deadline to solicit creditor support for any reorganization plan from Alpha is now May 30, 2016.
“The relief granted in this Order is without prejudice to the rights, pursuant to section 1121(d)(1) of the Bankruptcy Code, of (a) the Debtors to seek further extensions of the Exclusive Periods and (b) parties in interest to seek to shorten or terminate the Exclusive Periods,” said the Nov. 24 order from Judge Kevin R. Huennekens.
The judge on Nov. 24 also approved Alpha to reject several contracts. Noted that order: “Other than with respect to the letter agreement, dated June 1, 2010 by and among Donald L. Blankenship (‘Blankenship’), Zuckerman Spaeder LLP and Massey Energy Company (n/k/a Debtor Alpha Appalachia Holdings, Inc.) (‘Massey’) which is expressly rejected as to Massey’s obligations thereunder, nothing contained in this Order shall alter, modify or otherwise affect the respective rights of Blankenship and the Debtors, if any, under any agreement (including Certificates of Incorporation of Massey; the Retirement Agreement, dated December 3, 2010, by and between Massey and Blankenship; the Merger Agreement, dated January 28, 2011, by and between Massey and the Debtors) or otherwise applicable law and all such rights are expressly reserved.”
Blankenship had retired from Massey Energy in late 2010, ahead of the 2011 takeover of Massey by Alpha. Incidentally, Blankenship lately has been on trial in federal court over charges he ran a deficient safety program at Massey that led to a fatal mine explosion in West Virginia. Blankenship has denied the charges and the case is now before the jury.
The Alpha court filing describes the Blankenship-related deal as simply: “Engagement Letter for Legal Services dated June 1, 2010.”
Another of the rejected contracts was with AEP River Operations LLC and was described as: “Freight Contract dated March 1, 2010 (as amended). Appalachia Coal Sales Company, Inc. f/k/a Massey Coal Sales Company.”