Alpha Natural Resources has successfully emerged from Chapter 11 bankruptcy protection, but what effect that will have on the company’s idled operations in Letcher and Knott counties remains unknown.
On June 30, Alpha shut down subsidiary Enterprise Mining’s coal preparation plant at Roxana and EMC9 deep mine at Redfox in Knott County. That move came a year after Alpha idled its then-new North Fork No. 7 metallurgical deep mine in the Cumberland River area of Letcher County and 14 months after the company sold its North Fork No. 6 deep mine to Revelation Energy.
“We can’t speculate on the future of particular operations, but Alpha is still mining coal in eastern Kentucky,” company spokesman Steve Hawkins told The Mountain Eagle early Tuesday night.
In making the announcement than it was no longer in bankruptcy late Tuesday afternoon, Alpha said the reorganized company left the proceeding a smaller, privately held company that now operates 18 mines and eight preparation plants in Kentucky and West Virginia.
Enterprise Mining emerges as a subsidiary of Alpha Natural Resources LLC, itself a subsidiary of Alpha Natural Resources Holdings
Inc. and ANR Inc. In addition to the latter two firms, North Fork Coal Company is now under the umbrella of Alpha Appalachia Holdings LLC and Appalachia Holding Company LLC.
David Stetson, a graduate of Murray State University, has been appointed the new chief executive officer of Alpha. He replaces Kevin Crutchfield, who was earlier appointed as the new CEO of Contura Energy Inc., a new company formed and majority-owned by a group of Alpha’s first lien lenders that was created to acquire and operate Alpha’s core operations.
Specifically, Contura has acquired all of Alpha’s operations and reserves in Northern Appalachia (including the Cumberland mine complex) and the Powder River Basin, along with three Central Appalachian mining complexes (the Nicholas mine complex in Nicholas County, West Virginia, and the McClure and Toms Creek mine complexes in Dickenson and Wise Counties in Virginia). Contura also purchased Alpha’s interest in the Dominion Terminal Associates coal export terminal in eastern Virginia. The new firm has a workforce of more than 2,200 former Alpha employees.
The Wise and Dickenson operations formerly operated as Paramont Coal Company, which was merged into Maxxum Carbon Resources Inc. and then into Barbara Holdings Inc. before being dissolved during the bankruptcy proceedings. Paramont shut down three deep mines and reduced operations at two other deep mines in December 2015. It also merged into Barbara Holdings and later dissolved was Black Mountain Cumberland Resources.
It remained unknown at Mountain Eagle press time what effect Alpha’s emergence from bankruptcy would have on the $66,494 in delinquent Letcher County property and unmined mineral taxes Enterprise Mining owes for 2015, or the $309,076 Alpha’s North Fork Coal Company owes the county in unmined minerals taxes alone.
Combined with the $782,387 in unpaid taxes that Revelation Energy still owed the county when delinquent property taxes were published earlier this month, coal companies — working or bankrupt — now owe the county more than $1.2 million in unpaid taxes for 2015.
Stetson, the new Alpha CEO of the reorganized company, said, “By completing this restructuring, ANR emerges as a company with a solid financial foundation and a strong team to continue to mine and sell coal. We are now also better positioned to satisfy ANR’s environmental responsibilities. I am confident — even though coal markets continue to be challenged by both competitive and regulatory pressures — the company created by our Plan of Reorganization will have the structure, resources, and talent to successfully weather these challenges.”
Stetson continued, “There are many people to thank. ANR could not have successfully completed this process without the loyalty and work of employees across our organization. During the restructuring, we reached important agreements with key stakeholders that will create a more sustainable business model going forward, and we appreciate their support, which ensures our ability to continue serving our customers and playing a positive role in our communities.”
Stetson is a veteran coal executive with broad experience in the sector, including finance, mergers and acquisitions, corporate governance, legal and reclamation. He most recently held leadership positions with Trinity Coal, RAAM Global Energy and JW Resources.
Alpha made no mention of the hundreds of miners who were left jobless as a result of Alpha’s bankruptcy filing last August or the 4,580 former non-union miners and their spouses who lost their medical and life insurance benefits.
Alpha created controversy late last fall when it asked the bankruptcy court for permission to pay senior executives bonuses of up to $14.8 million at the same time the company was trying to cut retiree health benefits. In December 2015, former Alpha CEO Michael Quillen criticized the plan as not representing “the values the company was built on.”
Contura Energy announced Tuesday night that its acquisition of part of Alpha’s operations “was effectuated as part of Alpha’s Chapter 11 process, completed in under a year, involving holders of over $3.9 billion of debt obligations, various federal and state government entities, surety providers, union employees, pension beneficiaries, trade creditors, and others.”
“Today marks the successful culmination of a complex and arduous process, made possible by the tireless work of countless employees, collaboration among a diverse stakeholder group, and the unwavering commitment of Contura’s management team and owners to achieve a positive outcome,” said Crutchfield. “The result is the creation of a strong operational asset base, well-positioned to serve unique customer needs in today’s challenged coal market.”