Armstrong Energy third amended Chapter 11 plan takes effect

By Caroline Salls

Pittsburgh, Feb. 20 – Armstrong Energy, Inc.’s third amended plan of reorganization took effect on Tuesday, according to a notice filed with the U.S. Bankruptcy Court for the Eastern District of Missouri.

The plan was confirmed on Feb. 2.

Last month, Murray Energy Corp. announced that Armstrong had entered into an agreement with Murray subsidiary Murray Kentucky Energy, Inc. and some of Armstrong’s senior secured noteholders under which Murray Kentucky will acquire a 51% ownership interest in a new company that will own some assets formerly held by Armstrong Energy.

Murray said Armstrong’s secured noteholders will have a 49% ownership interest in the new company.

Treatment of creditors under the Chapter 11 plan will include the following:

• Administrative expense claims and priority claims will be paid in full;

• Holders of senior secured notes claims will receive 100% of the equity in an entity holding substantially all of the company’s assets, as well as $19 million in cash to be funded by Murray, $12 million in principal amount of notes to be delivered by Murray and all remaining collateral, collateral proceeds, assets and proceeds in the company’s general account until the notes claims are paid in full;

• Other secured claims will be treated in such a manner that they are unimpaired;

• Holders of general unsecured claims will receive a share of a general unsecured creditor reserve amount; and

• Existing equity interests will be cancelled with no distribution to the equityholders.

Armstrong, a diversified producer of low-chlorine, high-sulfur thermal coal from the Illinois Basin, is based in St. Louis. The company filed bankruptcy on Nov. 1 under Chapter 11 case number 17-47541.

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