The bankruptcy court for coal producer Walter Energy on Nov. 25 approved a stalking horse auction process for the company’s U.S. assets, with the stalking horse bidder being a group of Walter Energy creditors.
The Walter Energy companies currently in Chapter 11 protection at the U.S. Bankruptcy Court for the Northern District of Alabama include: Atlantic Development and Capital LLC; Atlantic Leaseco LLC; Blue Creek Coal Sales; Blue Creek Energy; J.W. Walter Inc.; Jefferson Warrior Railroad; Jim Walter Resources; and Maple Coal Co. LLC.
Noted the Nov. 25 court order: “The form of the Stalking Horse Agreement (which may be downloaded at http://www.kccllc.net/walterenergy or obtained from counsel to the Debtors upon written request), is hereby approved and is appropriate and reasonably calculated to enable the Debtors and other parties in interest to easily compare and contrast the differing terms of the bids presented at the Auction.”
Competing bids are due on these assets by Jan. 4, 2016. The auction is to take place on Jan. 5, 2016 at 10:00 a.m. (prevailing Central Time) at the offices of Bradley Arant Boult Cummings LLP, One Federal Place, 1819 Fifth Avenue North, Birmingham, Alabama 35203, or such other place and time as the debtors shall notify all necessary parties. The sale hearing to approve the sale(s) is to be held on Jan. 6, 2016, at 9:00 a.m. (prevailing Central Time), subject to extension or adjournment, at the U.S. Bankruptcy Court for the Northern District of Alabama, Southern Division, 1800 Fifth Avenue North, Birmingham, Alabama.
The Nov. 25 court order said: “The Debtors confirm that it is critical to the process of maximizing the value, and arranging an orderly sale, of the Acquired Assets to proceed by selecting the Stalking Horse Purchaser to enter into the Stalking Horse Agreement; without the Stalking Horse Purchaser having committed considerable time and expense in connection with the Sale of the Acquired Assets, the Debtors would potentially realize a lower price for such assets; and, therefore, the contributions of the Stalking Horse Purchaser to the process have indisputably provided a substantial benefit to the Debtors and their estates and creditors.”
On or before Jan. 4, 2016, at 12:00 p.m. (prevailing Central Time), the stalking horse bidder will provide to the debtors a list of those executory contracts and unexpired leases that it wants along with these assets..
The stalking horse agreement is an offer to purchase all of the “Acquired Assets.” The “Core Acquired Assets” is defined herein to mean the Acquired Assets minus (i) Blue Creek Assets, (ii) the Miscellaneous Real Property Assets and (iii) the Walter Coke Assets. Bidders who intend to submit Bbds for all or substantially all of the Core Acquired Assets should reference the stalking horse agreement in connection with such bids.
The assets are going up for sale in nine lots:
- Lot 1 – Core Acquired Assets: Alabama Underground and Gas, including Mine No. 4 and Mine No. 7; JWR Mine No. 5; Barge Loadout located in Tuscaloosa County, Alabama (owned by Walter Minerals Inc.); Highway 59 Mine; East Brookwood Mine; Blue Creek Coal Sales; Black Warrior Methane Corp. Stock/Black Warrior Transmission Corp. Stock; Port of Mobile Lease; Walter Black Warrior Basin LLC; Tuscaloosa Resources, Inc. (Swanns Crossing/Carter Mine).
- Lot 2 – Blue Creek Assets (also known as Blue Creek Energy Project);
- Lot 3 – West Virginia Assets: Maple Coal Co. LLC, Eagle Mine and Sycamore Mine, including the primary lease with respect to the mining property that is presently subleased from J. W. Walter Inc. (which currently holds the primary lease with Pardee Minerals); and Atlantic Leaseco LLC and its Gauley Eagle Mines.
- Lot 4 – Taft Assets, which are Choctaw, Robbins Road, Reid School, Blue Ridge, Gayosa.
- Lot 5 – Walter Minerals land holdings, Alabama non-mining property interests (including the Panther and Howton mines).
- Lot 6 – J.W. Walter Inc., West Virginia non-mining property interests (does not include lease from Pardee Minerals which will be part of Lot 3).
- Lot 7 – Walter Land Co., Louisiana non-mining property interests.
- Lot 8 – Select JWR Assets, including Mine No. 3, North River, Kellerman Prep Plant.
- Lot 9 – Walter Coke Assets.