Bankruptcy News

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Bankruptcy/Chapter 11 / Bonds / Energy

Walter Energy Chapter 11 Petition Filed

Walter Energy (fka Walter Industries) and 22 affiliated Debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the Northern District of Alabama, lead case number 15-02741. The Company, which is a leading metallurgical coal producer for the global steel industry, is represented by Patrick Darby of Bradley Arant Boult Cummings. The Company concurrently announced that it has entered into an agreement with certain of its senior lenders on the material terms of a restructuring. Walter Energy's non-U.S. operations, including those in Canada and the U.K., are not included in the filings. "This restructuring plan provides a roadmap for Walter Energy to establish a sustainable capital structure, make further changes to operational cost drivers, and ensure that the Company can continue to operate safely and competitively in the years ahead," said Walt Scheller, C.E.O. "With the support of our key senior lenders, we will use this process to pursue the best possible outcome on behalf of all of our stakeholders, including our employees and our communities. In the face of ongoing depressed conditions in the market for met coal, we must do what is necessary to adapt to the new reality in our industry." The terms of the restructuring contemplate the senior lenders converting all of their debt into equity. The agreement also establishes a timeline for confirmation of a Chapter 11 plan and the fulfillment of certain other conditions and milestones. A corporate release notes that if the Company cannot satisfy the various conditions and milestones or confirm a Chapter 11 plan, Walter Energy will pursue a sale of substantially all of its assets through a Court-supervised auction process.

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