One day ahead of a delinquency deadline to its lenders for a $1.8 million debt payment, and amid expectations that the third-largest coal firm in Wyoming will file for bankruptcy by the end of the week, Gillette-based Cloud Peak Energy has elected to pay up on a separate debt: local property taxes.
The company paid nearly $700,000 to Campbell County on May 8 — for land the company owns in Wyoming — ensuring that the county cannot easily offer up that debt in a land sale. The troubled coal company still owes $8.3 million for coal from production that local officials are less and less confident the company will pay.
The Campbell County production taxes were due March 1, but Friday is the drop-dead date, after which Cloud Peak will be delinquent. Unlike property taxes, production taxes are difficult for local officials to enforce.
“That’s a strategic decision,” Mark Christiansen, commissioner for Campbell County, said of Cloud Peak’s land tax payment.
Christiansen said he still hopes that Cloud Peak will pay its taxes in the next day and a half but felt it was unlikely.
Cloud Peak has been leaning toward a bankruptcy filing for some time, with the Wall Street Journal reporting Tuesday that a Chapter 11 filing would come by the end of the week.
The coal company elected not to a pay a $1.8 million debt payment on March 15, taking advantage of a 30-day grace period. It entered into a forbearance agreement with its lenders, gaining another two weeks, then a third stay agreement for an additional week.
On Wednesday, the company reported it had agreed to yet another extension with the new deadline to pay its debt set for 11:59 p.m. Friday.
Cloud Peak operates three Powder River Basin mines: Antelope, Cordero Rojo and Spring Creek. Its mines account for about 20 percent of Wyoming’s Powder River Basin coal mine workforce.