Kentucky is the heart of central Appalachian coal country. The coal industry is well known as one of the Commonwealth’s top industries. However, the cyclical nature and volatility of coal prices can lead to a coal company, contract miner, or supplier seeking relief from their debts through bankruptcy.
DelCotto Law Group has experience in representing different constituencies in coal bankruptcies including debtors, creditors, lessors, shareholders, landowners, creditors’ committees, and preference defendants. Several issues can arise in a coal bankruptcy that impact the outcome of the case. These issues include:
- Bonding – What amounts are due to continue all necessary bonding? Are bonds in danger of being called? What collateral supports the bonds and who owns it?
- Reclamation/Environmental obligations – Is the debtor current on its reclamation obligations? What remediation needs to be performed? How active are the state and federal regulators in the case? What amount is truly needed to abate any violations?
- Permitting – Are there any administrative actions pending to terminate or restrict the use of permits? Can the permits be transferred in a 363 sale? Are there pending MSHA violations or issues?
- Coal Supply Contracts – Does the debtor have both long-term and short-term coal supply contracts? When do these contracts expire? Does the debtor have sufficient income from these contracts to fund the bankruptcy including administrative costs? What is the impact of rejecting such contracts?
- Lease Issues – Did any coal leases terminate pre-petition? Can the debtor perform its obligations under the leases? What amounts are necessary to cure? How are equipment leases and mineral leases treated differently in bankruptcy?
DelCotto Law Group’s experience in the coal industry provides it with the ability to guide its clients through these complex matters and protect their interests in a multi-player field.
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