Trinity Coal files amended plan, statement, plans Nov. 8 confirmation

By Jim Witters

Wilmington, Del., Sept. 30 - Trinity Coal Corp. filed an amended Chapter 11 plan of reorganization and related disclosure statement, more fully detailing the proposed treatment of creditors on Sept. 29 with the U.S. Bankruptcy Court for the Eastern District of Kentucky.

As previously reported, Trinity proposed a plan in which plan sponsor Essar Global Fund Ltd. will repay up to $22 million of the debtor-in-possession financing facility and arrange for the total outstanding amount of letters of credit that were rolled-up into the DIP financing to be replaced by an equal amount of letters of credit provided by an Indian government-owned bank or sponsor relationship private sector bank.

Essar will repay $56 million of guaranteed credit agreement obligations in cash, and the pre-bankruptcy lenders will waive their remaining claims.

Essar will purchase 100% of the ownership interests in the company to be issued under the plan for a cash purchase price not to exceed $16.43 million, minus the amount of specified administrative expense claims.

The sponsor will enter into an agreement with the committee securing its support for the plan.

Essar and its affiliates will waive all unsecured claims they hold against Trinity Coal.

Creditor treatment

Under the amended plan, treatment of creditors includes:

• Holders of allowed administrative claims, priority tax claims, other priority claims and other secured claims will be paid in full in cash;

• Holders of allowed CAT claims will receive the collateral securing the claim, plus interest;

• Holders of senior secured credit facility claims will receive $55 million to be applied to the administrative agent for the satisfaction of the guaranteed note obligations.

The debtors also will pay $1 million directly to the administrative agent to satisfy the senior secured credit facility claims;

• Holders of reclamation claims will have their claims reinstated;

• Holders of general unsecured claims will receive a proportional share in the assets of the liquidation trust.

On the plan effective date the reorganized deep water entities and the liquidating trustee will enter in to a royalty agreement for further distributions to the general unsecured creditors;

• Holders of Essar unsecured claims will receive 100% of the new common stock of the reorganized TPC and 100% of the new common stock of the reorganized deep water entities;

• Intercompany claims may be reinstated as of the plan effective date.

No distribution will be made. At the reorganized debtors' option, the claims may be canceled or compromised.

• Holders of 510(b) claims will receive no distribution;

• Intercompany interests not extinguished, reissued or transferred by a debtor to a reorganized debtor or the plan sponsor will be reinstated; and

• Holders of TPC interests will receive no distribution.

No hearing has been scheduled to consider the adequacy of the disclosure statement.

A plan confirmation hearing is scheduled for 9:30 a.m. ET on Nov. 8.

Trinity, a Scott Depot, W.Va.-based coal mining company, was brought into involuntary bankruptcy on Feb. 20, 2013. Its Chapter 11 case number is 13-50364.

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