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Bankruptcy 101: a primer for U.S. coal markets
"The goal is to produce a plan that shows the business can be sustainable. If it's approved by the judge, the firm can re-emerge from bankruptcy. If no plan is approved, the firm may be sold or just go extinct."Bankruptcy 101: a primer for U.S. coal markets
Saqib Rahim, E&E reporter
EnergyWire: Tuesday, August 11, 2015
...The many maladies of the U.S. coal industry have forced dozens of coal firms into business purgatory: Chapter 11 of the bankruptcy code. Alpha, the United States' second-largest publicly listed coal business, followed in the footsteps of Walter Energy Inc., Patriot Coal Corp., James River Coal Co. and dozens of smaller players that have filed in the last two years.
Two of Alpha's rivals, Peabody Energy Corp. and Arch Coal Inc., are still standing, but their financial fragility means bankruptcy can't be ruled out.
Companies that go through a Chapter 11 "restructuring" will have to take a hard look -- with their investors, and in front of a judge -- at what their businesses can be in the future. It will not be an easy question to answer.
"It's very hard for people to produce a reliable forecast that says, 'Here's where the bottom is,'" said Stephen Arbogast, a finance professor at the University of North Carolina Kenan-Flagler Business School. "So it's an extraordinarily open and painful restructuring that's going to be a combination of consolidation through Chapter 11 and outright liquidation. Because nobody can see any growth and nobody knows where the bottom is."...
Saqib Rahim, E&E reporter
EnergyWire: Tuesday, August 11, 2015
...The many maladies of the U.S. coal industry have forced dozens of coal firms into business purgatory: Chapter 11 of the bankruptcy code. Alpha, the United States' second-largest publicly listed coal business, followed in the footsteps of Walter Energy Inc., Patriot Coal Corp., James River Coal Co. and dozens of smaller players that have filed in the last two years.
Two of Alpha's rivals, Peabody Energy Corp. and Arch Coal Inc., are still standing, but their financial fragility means bankruptcy can't be ruled out.
Companies that go through a Chapter 11 "restructuring" will have to take a hard look -- with their investors, and in front of a judge -- at what their businesses can be in the future. It will not be an easy question to answer.
"It's very hard for people to produce a reliable forecast that says, 'Here's where the bottom is,'" said Stephen Arbogast, a finance professor at the University of North Carolina Kenan-Flagler Business School. "So it's an extraordinarily open and painful restructuring that's going to be a combination of consolidation through Chapter 11 and outright liquidation. Because nobody can see any growth and nobody knows where the bottom is."...
More at http://www.eenews.net/stories/1060023244