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Walter Energy cash management reconsideration denial appealed
By Mark Reccek
Bethlehem, Pa., Sept. 4 – The court order denying reconsideration of Walter Energy, Inc.’s cash management order was appealed by Dominion Resources Black Warrior Trust through trustee Southwest Bank, according to a Thursday filing with the U.S. Bankruptcy Court for the Northern District of Alabama.
As previously reported, Walter Energy filed motions related to use of its cash collateral and cash management. Under the motions, the debtors’ cash and other property constituted collateral of their lenders subject to protective liens and permitted use of a “zero-balance” cash management system where receipts from operations could be swept into concentration or disbursement accounts.
The trust previously said the motions did not separately segregate or provide separate treatment for production proceeds related to the trust’s overriding royalty interests.
A previous news release indicated the trustee filed motions asking the court to reconsider and amend the cash management order and objected to the cash collateral motion seeking segregation of production proceeds related to the overriding royalty interests.
The trustee also asked the court to rule that those proceeds are not property of the Walter Energy bankruptcy estate.
The trust further said trustee Southwest Bank was informed by Walter Black Warrior Basin LLC parent Walter Energy that the latter is not permitted to pay obligations that arose before July 15, including royalty payments.
Walter Energy, a metallurgical coal producer based in Birmingham, Ala., filed for bankruptcy on July 15 in the U.S. Bankruptcy Court for the Northern District of Alabama. The Chapter 11 case number is 15-02741.
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