Westmoreland Coal Co. and its affliates asked a bankruptcy court to grant a 120-day extension of the exclusive period to file and solicit acceptance of its reorganization plan.
The court recently approved Westmoreland's disclosure statement and solicitation materials as the company proceeds with a restructuring support agreement contemplating a going-concern sale and commits the consenting creditors to serve as the stalking-horse bidder for the sale. While Westmoreland and its debtor subsidiaries are on track to consummate a Chapter 11 plan on Feb. 28, 2019, the company said maintaining the exclusivity period is crucial to marketing assets related to Westmoreland affiliates Westmoreland Resources GP LLC and Westmoreland Resource Partners LP and its subsidiaries, collectively referred to in the filing as the WMLP Debtors.
The sale process for the WMLP assets is ongoing and a stalking-horse bidder for those assets has not yet been selected, according to the Dec. 20 filing in the U.S. Bankruptcy Court for Southern District of Texas. The current exclusivity period expires Feb. 6.
During the exclusivity period, only the debtor can file a reorganization plan; after it expires, a creditor or the case trustee may file a competing plan.
"To capture the full benefit of the restructuring support agreement, the [Westmoreland debtors] must proceed through these Chapter 11 cases at a steady pace," the company wrote. The agreement has the support of approximately 87% of the company's pre-petition secured term lenders and secured noteholders, Westmoreland wrote in its filing with the court.
Westmoreland wrote that there is "much work" remaining to address key matters around the reorganization, "particularly with respect to the debtors' labor and retiree obligations." The company reached an agreement with the leadership of the International Union of Operating Engineers to modify the collective bargaining agreement associated with the company's San Juan mine operations, but the membership refused to ratify the agreement, according to the filing. Westmoreland has also yet to secure an agreement with the United Mine Workers of America, the company wrote.
U.S. Bankruptcy Judge David Jones also approved Westmoreland's motion seeking approval of a program to spend $1.5 million per quarter to retain key personnel. The judge found the program in the best interest of the debtors' estates, their creditors and other parties.