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James River Coal Company
, today announced that the Company and its subsidiaries have filed
voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code
in the Bankruptcy Court for the Eastern District of Virginia Richmond
Division. James River intends to use the Chapter 11 process to continue
implementing a comprehensive turnaround plan aimed at addressing its
challenges in the changing coal mining industry. James River expects its
mining operations and customer shipments to continue in the ordinary course
throughout the restructuring process.
In conjunction with its restructuring, James River will enter into a $110
million debtor-in-possession (DIP) financing facility with several large
financial funds. Upon approval by the Bankruptcy Court, the new financing and
cash generated from James River's ongoing operations will be used to support
the business during the restructuring process.
Peter T. Socha, Chairman and Chief Executive Officer commented: "The coal
markets in the U.S. have changed dramatically during the past several years.
Some of these changes are cyclical due to continued weakness in the real
economy. Other of the changes are more permanent like changes in government
environmental regulations, improved methods to produce natural gas, and
switching between coal basins by domestic power utilities. We have made a
number of large and significant changes to our mine operations and
administrative overhead in response to the changes in the coal markets. Now
we need to adjust our balance sheet and debt structure to align ourselves to
the new industry.
We took this action to restructure under Chapter 11 because it will allow us
to adjust the balance sheet and improve our liquidity in a controlled and
definitive manner. We will also continue to explore and evaluate potential
strategic alternatives for the Company, such as a capital investment through a
plan of reorganization or a sale of one or more portions of the Company.
We believe this provides our best course of action to support the best
interests of our suppliers, customers, employees and other critical
constituents. We believe we will come out of this a much stronger and a more
financially secure company."
James River has filed various motions with the Bankruptcy Court in order to
ensure the continuation of normal operations, including requesting
authorization to continue paying employee wages and providing health care and
other benefits. James River has also asked for authority to continue existing
customer programs and intends to pay suppliers in full under normal terms for
goods and services provided after the filing date of April 7, 2014.
Court filings and other information related to these cases are available on a
separate website administered by James River's claims agent, Epiq Bankruptcy
Solutions, LLC, at http://dm.epiq11.com/JamesRiverCoal.
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