Mission Coal Co. LLC finalized a bankruptcy reorganization plan that, if approved by a federal court, will dissolve the company.
The plan would designate an administrator to "wind down" Mission's businesses and affairs and reconcile claims, according to a disclosure statement the company filed in the U.S. Bankruptcy Court for the Northern District of Alabama on Jan. 2. The Tennessee-based coal producer, which filed for Chapter 11 bankruptcy protection in October 2018, wrote that the plan would "avoid the lengthy delay and significant cost of liquidation under chapter 7 of the Bankruptcy Code."
Mission has about $175 million in debt obligations between a $104 million first lien credit agreement and $71 million second lien credit agreement, according to the disclosure.
The company plans to sell "substantially all" of its assets, transferring all assumed liabilities including any cure costs that may be needed for any executory contracts or unexpired leases following the transaction. Other liabilities include workers compensation and occupational health claims that arise after the transaction closes as well as all black lung responsibilities, among others.
Those assets include all inventory, equipment, assumed contracts, transferred permits, owned and leased property, and all coal reserves excluding those under its Pinnacle businesses. Mission controls about 318 million tons of proven and probable coal reserves between two deep mines and a surface mine in West Virginia and one deep mine in Alabama.
Upon the plan's effective date, the board of directors would be dissolved, leaving only the plan administrator to direct matters pertaining to winding down the company, such as resolving remaining claims and paying off claims the buyer is not responsible for. Once that is complete, the coal producer will liquidate.
Under the proposal, Mission would provide for 100% recoveries for those holding debtor-in-possession facility claims, allowed administrative claims, priority tax claims, estate retained professional fee claims, other priority claims and other secured claims. The general unsecured claims amount would be distributed to allowed holders of unsecured claims under the proposed plan.
Mission will seek to find a "good-faith compromise and settlement" of all claims, and distributions made to holders of the allowed claims will be final. Some classes of claim holders will get to vote to accept or reject the plan by 4 p.m. CT on March 11.
The court approved Mission's timeline to auction off its assets Dec. 21, 2018. The deadline to bid on most assets is 4 p.m. CT on Feb. 13, and the auction will take place at 10 a.m. ET on Feb. 27.