Blackhawk Mining LLC is on schedule to emerge from Chapter 11 bankruptcy reorganization without impairing its general unsecured claims, according to court documents.
The coal miner's reorganization plan will allow it to restructure its balance sheet and reduce debt by more than $650 million, ensure the company has enough money to fund its exit and post-emergence liquidity needs and let employees and business partners know the company is well-positioned for the future, according to documents filed Aug. 26 with the U.S. Bankruptcy Court for the District of Delaware.
Unless otherwise stated in the plan, each debtor will exist after the plan's effective date as a separate corporate entity, limited liability company, partnership or other form with corresponding powers.
The debtors' plan "provides for meaningful recoveries for all classes affected by the debtor release," according to court documents. General unsecured claims will be paid in full; first lien term loan claims will receive their pro rata share of $225 million of the new first lien loan and 71% of the new common stock in the reorganized company; and second lien term loan claims will receive their pro rata share of 29% of new common stock in the reorganized company.
The plan also provides for the releasing parties, giving all interested parties "ample opportunity to evaluate and opt out" of the third-party release by objecting to the third-party release, which is a "consensual release of all creditors and interest holders who did not object."
"The third-party release was a critical negotiated term of the plan," according to the court documents. "Without the third-party release, the debtors' key stakeholders would not have been willing to fund and otherwise support the consensual restructuring transactions contemplated by the [restructuring support agreement], support confirmation of the plan, and enable the debtors to emerge from bankruptcy as a viable company while paying their trade and known general unsecured creditors in full."
The debtors and reorganized debtors are required to indemnify certain released parties under their credit facilities, among other agreements, and with respect to management.
On the plan's effective date, the reorganized Blackhawk board will include five people, including the CEO, and the terms of the current board members will expire.
Unless otherwise noted, the debtors will amend, adopt, assume and/or honor any contracts, agreements, policies, programs and plans for compensation, retention plans, health care and disability benefits as well as retirement benefits, among other things.
