Surprise! Blackjewel Files For Chapter 7, Stiffing Workers, Health Coverage, Taxes & Reclamation
The convoluted bankruptcy of coal company Blackjewel has hit another turn of events as the company’s former CEO moved to liquidate the company. A federal judge granted a motion last week to convert the bankruptcy from Chapter 11 to Chapter 7. That means that instead of exiting bankruptcy as a new company with less debt, Blackjewel L.L.C. will effectively cease to exist.
Former Blackewel CEO Jeff Hoops, who is currently under investigation for mismanagement of the company, said in a filing that Blackjewel had only $146,000 in unrestricted funds, and could not pay millions in back taxes, reclamation fees and employee healthcare expenses.
“Given [Blackjewel’s] lack of operating assets, permanent, negative net cash flow, and continuing financial losses, there is no reason to continue this proceeding as a Chapter 11 and incur the substantial and unnecessary administrative expenses attendant to doing so,” Hoops and other filers said in the November 25 motion.
“It’s pretty common for companies to shift from a Chapter 11 to a Chapter 7 when they’re struggling like Blackjewel is,” said University of Chicago School of Law assistant professor Joshua Macey, a coal bankruptcy expert. “Given how long this bankruptcy has dragged on, how poor conditions for coal are right now, how speculative and unprofitable Blackjewel’s assets have been, it isn’t surprising that it’s moving to a liquidation.”
EDIT
https://ohiovalleyresource.org/2020/12/02/blackjewel-coal-moves-to-liquidate-leaving-millions-unpaid-to-workers-and-regulators/