Another major Kentucky coal producer plans to sell off its assets in a Chapter 11 bankruptcy case that could impact hundreds of coal miners in Eastern Kentucky.
According to filings in the U.S. Bankruptcy Court for the Eastern District of Kentucky, Cambrian Coal LLC plans to put virtually all of its assets up for bid and, pending court approval, will auction them off next month.
Cambrian’s proposed sale would mark the second major auction of Kentucky mines this summer. It would come just a month after the auction of mines belonging to Blackjewel LLC, whose tumultuous bankruptcy sparked protests that blocked a coal train in Harlan County.
According to court filings, Cambrian has kept its mines open and has continued to pay its employees throughout its Chapter 11 bankruptcy. The company employs about 660 people at three major mining operations in Eastern Kentucky and Virginia.
It is unclear what will happen to Cambrian’s employees and its mines if the sale is approved and successful.
Attorneys representing Cambrian could not be reached for comment.
The company was formed in 1991 and has grown by purchasing mines and other assets from large coal companies, including Marshall Resources, Arch Coal and TECO.
Company President Mark Campbell said in a court motion that the bankruptcy was largely caused by debt it acquired while buying up other coal companies, and by the general decline of the thermal coal industry.
In 2015, Cambrian’s purchase of Perry County Coal, Premier Elkhorn and Clintwood Elkhorn brought with it as much as $60 million of debt that Cambrian had agreed to pay over a four-year period.
The company had planned to produce 4.2 million tons of coal in 2018, but its lack of capital meant it could only produce 2.8 million tons.
After its 2015 acquisitions, Cambrian’s revenue increased from about $132 million in 2015 to $272 million in 2017, but revenue decreased in 2018.
Because of rising production costs, the company suffered net losses in 2015, 2016, 2017 and 2018, according to court filings. The company filed for Chapter 11 bankruptcy June 16.
Cambrian CEO Jim Booth, who is a member of the University of Kentucky Board of Trustees, resigned less than two weeks prior to the company filing bankruptcy.
A proposed sale order, if approved, would set a Sept. 11 bid deadline for Cambrian’s mines. The company would then hold an auction Sept. 18, and a sale hearing Sept. 24.
The company has millions of dollars in debt to various businesses in Kentucky and other states, including $2.7 million to Parsley’s General Tire, Inc., in London; $1.15 million to American Electric Power; and $676,000 to R.D. Adkins Trucking, LLC in Elkhorn City in Pike County.
Cambrian also owes taxes and fees to various governmental agencies. It owes about $720,000 to the Commonwealth of Kentucky, $53,000 to Virginia and $85,000 to the federal government.
Cambrian’s bankruptcy has appeared much smoother than that of Blackjewel, which left hundreds of Kentucky miners with cold paychecks and uncertainty over their future at the mines.
A bankruptcy judge in West Virginia approved the sale of Blackjewel’s Kentucky mines earlier this week.
The buyer, Kopper Glo Mining, LLC., said in a news release that it plans to bring back many former Blackjewel employees, and is committed to paying a portion of the back wages of those employees.
“The coal produced from these operations has been an extremely important part of the development of this country, and these operations will continue to contribute to the economic growth of the communities where they are located,” said Hunter Hobson, president of Kopper Glo. “We are committed to bring as many people back to work as quickly as possible.”