Trinity Coal's plan effective date is Jan. 31; two officers resign

By Lisa Kerner

Charlotte, N.C., Feb. 3 - Trinity Coal Corp.'s amended plan of reorganization became effective Jan. 31, according to documents filed Feb. 1 with the U.S. Bankruptcy Court for the Eastern District of Kentucky.

The plan was confirmed on Nov. 6.

As previously reported, the proposed plan calls for Essar Global Fund Ltd. to repay as much as $25 million of the company's 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.

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

Creditor treatment

Under the confirmed plan, treatment of creditors includes the following:

• Holders of allowed administrative claims, priority tax claims, other priority claims, gap period 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 Trinity Coal debtors also will pay $1 million directly to the administrative agent to satisfy the senior secured credit facility claims;

• Reclamation claims will be reinstated. No distribution will be made under the plan;

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

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 reorganized TPC;

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

No distribution will be made. At the reorganized company's 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.

As of the effective date, David Stetson has resigned his position as chief restructuring officer and Michael Dean has resigned his position as chief financial officer of Trinity Coal and its affiliates, according to court documents filed Jan. 31.

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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