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Murray Energy submits plan to sell off assets, wind down estate in restructuring

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Murray Energy submits plan to sell off assets, wind down estate in restructuring

Arlington, Virginia — Murray Energy's recent restructuring proposal includes plans to sell off substantially all of its assets and wind down the estate, though a new Murray entity would be able to act as a stalking horse bidder for the assets.

The largest privately-owned US coal producer filed for bankruptcy protection in October, and owns and operates 13 active mines across Appalachia as well as the Illinois Basin, Uinta Basin and in Colombia, according to court documents. A more challenging market in recent years resulted in dozens of coal company bankruptcies since 2008, which Murray Energy and its affiliates avoided until more recently.

Under the plan filed Tuesday in the US Bankruptcy Court for the Southern District of Ohio, a plan administrator would be appointed to wind down Murray Energy's and its certain debtor subsidiaries' assets, resolving any disputes, making final payments and liquidating the company.

The plan also would allow superpriority lenders to direct the superpriority agent to form a new entity, "Murray NewCo," to act as a stalking horse bidder on the companies' asset sale and submit an offer. If there are no higher bids on the assets, Murray NewCo would take over the assets.

"The Debtors' proposed Plan will allow the Debtors to emerge as a going concern, ensuring that the Debtors' assets will continue operating and providing employment to thousands of employees," court documents state.

The plan includes the formation of a wind down trust following the sale transaction to take on all the remaining assets and wind down the estates "with no objective to continue or engage in the conduct of a trade or business, except to the extent reasonably necessary to and consistent with the liquidating purpose of the Wind-Down Trust," according to the filing. The trust seeks to liquidate and convert the assets into cash to distribute to beneficiaries.

"[T]he Plan Administrator shall retain the authority to take all necessary actions to dissolve the Debtors in, and withdraw the Debtors from, applicable states and provinces to the extent required by applicable law," according to the filing.


Murray NewCo's new board will include former Murray Energy President and CEO Robert Murray as board chairman well as Robert Moore, who leads Murray Energy and affiliated company Foresight Energy LP, as president and CEO of the new entity.

Murray NewCo would enter into new employment contracts with employees under the plan. The court also wrote that the debtors are authorized to continue or modify their workforce programs and implement new policies without further court approval.

While many of its competitors eliminated some of their obligations through bankruptcy reorganizations, Murray Energy and its subsidiaries "continued to satisfy their significant financial obligations required by the weight of their own capital structure and legacy liability expenses," the plan states.

"As a result, Murray generated little cash after satisfying debt service obligations, paying employee health and pension benefits, and maintaining operations," according to the filing.

As debt and legacy liabilities piled up and market conditions declined, the debtors struggled to find a path forward, eventually resulting in negotiations with an ad hoc group of superpriority lenders pertaining to the entities' financial and restructuring needs.

"It became clear that any restructuring would require the Debtors to seek bankruptcy protection to effectuate a sale of substantially all the Debtors' assets and a significant reduction in debt obligations," the filing states.

-- Ellie Potter, S&P Global Market Intelligence,

-- Edited by Rocco Canonica,