James River Coal Confirms Ch. 11 Bankruptcy Reorganization in Virignia
James River Coal Company (NASDAQ: JRCC), 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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