James River Coal Files Bankruptcy - WOWK 13 Charleston, Huntington WV News, Weather, Sports

James River Coal Files Bankruptcy

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James River Coal Company announced April 7 the company and its subsidiaries have filed voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the Eastern District of Virginia Richmond Division.

"James River intends to use the Chapter 11 process to continue implementing a comprehensive turnaround plan aimed at addressing its challenges in the changing coal mining industry," a news release from the company states.

The company entered into a $110 million in debtor-in-possession financing agreement, but gave assurances that mining operations and coal shipments will continue as usual.

If approved by the bankruptcy court, new financing and cash generated from James River's ongoing operations would be used to support the business during the restructuring process.

"The coal markets in the U.S. have changed dramatically during the past several years," said James River Chairman and CEO Peter Socha. "Some of these changes are cylical due to continued weakness in the real economy.

"Other of the changes are more permanent, like changes in government, environmental regulations, improved methods to produce natural gas and switching between coal basins by domestic power utilities."

Socha said the company has made a number of significant changes to its mine operations and overhead in response to the changes in coal markets.

"Now we need to adjust our balance sheet and debt structure to align ourselves to the new industry," he said. "We took this action to restructure under Chapter 11 because it will allow us to adjust the balance sheet and improve our liquidity in a controlled and definitive manner.

"We will also continue to explore and evaluate potential strategic alternatives for the company, such as a capital investment through a plan of reorganization or a sale of one or more portions of the company."

James River Coal Company sells metallurgical, bituminous steam and industrial-grade coal to electric utility companies and industrial customers both domestically and internationally. The company's operations are managed through operating subsidiaries located throughout eastern Kentucky, southern West Virginia and southern Indiana.

James River has filed various motions with the bankruptcy court in order to ensure the continuation of normal operations, including requesting authorization to continue paying employees wages and providing health care along with other benefits.