According to court documents, Cambrian Holding Co. filed for Chapter 11 bankruptcy protection in U.S. District Court in Lexington, Ky. According to a statement issued by the company following the June 19 filing, the company “will explore a sale process under court supervision.”
Cambrian Holding Co., which lists its headquarters as an address at Belcher, Ky., near Elkhorn City, listed nearly $21 million in debt with its 20 largest creditors. S&P Global reports that Cambrian listed assets totaling between $10 million and $50 million and liabilities between $100 million and half a billion dollars. A federal judge granted approval following the filing for Cambrian to continue paying employee wages and benefits, including health care costs.
Cambrian Holding Co. is the corporate holding entity for numerous coal mining operations. Among those are Perry County Coal in Hazard, Ky.; Premier Elkhorn Coal near Dorton, Ky.; and Clintwood Elkhorn Mining LLC, which operates at Feds Creek, Ky., and Hurley, Va. Perry County Coal is served by CSX off the railroad’s former L&N Rockhouse Subdivision. CSX also serves Premier Elkhorn at the Myra prep plant on the Sandy Valley & Elkhorn Subdivision, a coal branch off CSX’s former C&O Big Sandy Sub. Norfolk Southern serves both Clintwood Elkhorn Mining operations off its former N&W Buchanan Branch which connects with both the Pocahontas Division in West Virginia and the Clinch Valley District in southwest Virginia. Those operations currently load several trains per week and were listed in a statement from Cambrian as the company’s primary operating locations.
According to a report by legal industry newsletter Law360, Cambrian Holding Co. President Mark Campbell, in federal bankruptcy filings, blamed falling coal prices nationwide and the company’s purchase of Teco Energy, which formerly owned and operated Premier Elkhorn’s Myra prep plant, for its financial trouble. As part of the purchase of Teco, Cambrian agreed to pay workers compensation and black lung liabilities, which were self-insured by Teco. The purchase eventually led to a lawsuit against Cambrian Holding by Teco for a failed payment. The Law360 report also says the extended downturn in the coal industry further hampered Cambrian’s ability to raise more revenue. A statement by Campbell issued last week following the Chapter 11 filing says the company’s mines will continue to operate, and that the bankruptcy filing will allow the company to prepare for an eventual sale.
Calls to Cambrian Holding Co. and to the law firm in Lexington overseeing the bankruptcy filing were not successful.
Market forces at work. Natural gas is cheaper than coal, so, utilities are closing coal fired plants and building gas fired plants.
Another casualty in the “war on coal.”
Excellent report.
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