CASPER – Bankrupt coal operator Blackjewel continues to seek additional funding to reopen its two shuttered coal mines in Campbell County, company lawyers said during a weekend bankruptcy hearing.
The company will present a new financial package to the court by Friday, or sooner. U.S. District Judge Frank Volk, who must approve any new loan, said he will expedite the emergency hearing if Blackjewel secures additional money before that date.
If Blackjewel’s new financial proposal receives a green light, it plans to reopen its mines and employ at full capacity again, lawyers for the company said.
“The plan is to bring the mines back online and bring employees back at that time,” a lawyer for Blackjewel said. “We will pay (workers) pre-petition wages that they have currently not received as part of bringing them back.”
Blackjewel closed the Eagle Butte and Belle Ayr coal mines – the nation’s fourth and sixth largest by production – on July 1, after a previous lender had withdrawn during the company’s Chapter 11 bankruptcy financing. Hundreds of workers suddenly lost their jobs as the mines idled.
Last Wednesday, Volk denied a $20 million financing agreement for Blackjewel. But in another emergency hearing that same day, the court approved a loan of up to $5 million from Riverstone Credit Partners, allowing management to perform maintenance at the mines and prevent further damage while the company continued to negotiate additional financing. Terms of that loan required the resignation of Blackjewel CEO Jeff Hoops.
The financing has not been enough to fully resume operations at the mines, a Blackjewel representative said during a previous hearing. But certain employees in “critical positions” have been brought back on the mines, Blackjewel attorneys said Saturday. The attorneys did not specify how many employees have returned.
In the aftermath of the bankruptcy, worker paychecks that were usually deposited on Fridays had been withheld and cashier checks were distributed instead. But several workers said banks placed holds on their cashier checks, issued by United Bank in West Virginia, and they have yet to receive full compensation. Attorneys for United Bank said Saturday Blackjewel did not have sufficient funds in the company’s bank account at the time checks were issued.
At a hearing held on Independence Day, the judge urged Blackjewel attorneys to ensure United Bank in West Virginia cleared the checks as soon as possible.
In May, Cloud Peak Energy declared bankruptcy. The coal giant owns the Antelope and Cordero Rojo mines. Last month, Peabody and Arch Coal announced a massive deal. While not technically a merger, it would allow the companies to operate the nation’s two biggest coal mines – Black Thunder and North Antelope Rochelle – as a single complex.