The bankrupt coal operator Blackjewel LLC has yet to finalize a new financing proposal that would bring the company’s coal mines back to full operation, attorneys for the company said at a federal bankruptcy court hearing Friday. If the company obtains long-term debtor-in-possession funding over the weekend, the court may reconvene as soon as Monday for deliberations, according to the judge.
“We have made progress toward (new financing) but are not there yet,” Blackjewel attorney Stephen Lerner said Friday.
Blackjewel has continued to seek lenders to help fund the reopening of two shuttered coal mines in Campbell County as the company restructures its finances in bankruptcy court. If a new financial proposal receives a green light from U.S. District Judge Frank Volk, the company plans to reopen its mines and employ at full capacity again, attorneys said again Friday.
Blackjewel closed the Eagle Butte and Belle Ayr coal mines — the nation’s fourth and sixth largest by production — on July 1, after a previous lender had withdrawn during the company’s Chapter 11 bankruptcy financing.
Hundreds of workers suddenly were out of work as the mines idled.
Volk denied a $20 million financing agreement for Blackjewel two days after the closures. But in another emergency hearing that same day, the court approved a short-term debtor-in-possession loan of up to $5 million from Riverstone Credit Partners. The small loan allowed management to perform maintenance at the mines and prevent further damage. Terms of that loan required the resignation of Blackjewel CEO Jeff Hoops.
Only about 140 employees have been brought back nationwide for minimal maintenance and shipment of coal produced before the closures, Lerner said. The mines are not producing new coal at this time.
In the aftermath of the bankruptcy, paychecks usually deposited on Fridays had been withheld and cashier checks were distributed instead. But several workers said banks placed holds on their cashier checks, issued by United Bank in West Virginia, and they have yet to receive full compensation.
Lerner said Friday that “almost all” the cashier checks had been presented for payment, with about $15,000 still awaiting processing.
Blackjewel also did not properly distribute promised retirement payments into workers’ accounts before the mines closed, Lerner admitted.
“We will catch up and make up on those payments,” he said. “We can assure the court that we are working to have those paid in full once employees come back to work.”
As of July 1, when it filed for bankruptcy, Blackjewel owed about $146 million in taxes, including $119 in severance taxes, according to a motion submitted to the court.
On July 11, the committee of unsecured creditors filed an objection to the motion due to the “lack of clarity” about the amount Blackjewel owed in taxes and where the funds would come from, among other concerns. The judge postponed discussion of Blackjewel’s outstanding taxes until later in July.
Several miners filed letters to the judge on Friday, including a group of Blackjewel workers in Eastern West Virginia. “We worked our butts off for this company and they don’t care about the men whatsoever,” the letter stated. “We have reached out to you for your help and would great (sic) appreciate it for you could help us get our pay (what we are owed).”