Walter Energy gets approval of Coal Acquisition settlement agreement

By Mark Reccek

Bethlehem, Pa., Dec. 23 – Walter Energy, Inc. received court authorization to enter into a global settlement agreement with Coal Acquisition LLC, a newly formed entity owned by members of the company’s senior lender group, in which the company will assume an estimated $115 million to $122 million in liabilities, according to an order filed Tuesday with the U.S. Bankruptcy Court for the Northern District of Alabama.

As previously reported, the agreement provides that Coal Acquisition will satisfy cure obligations related to the assumption of the assumed contracts, post-petition trade payables and reclamation liabilities, as well as black lung liabilities.

The agreement also stipulates the committee will receive 1% of common equity in Coal Acquisition at closing, and Coal Acquisition will contribute $200,000 at closing to the equity trust.

Additionally, Coal Acquisition will waive all causes of action under the Bankruptcy Code.

“The global settlement is a substantial achievement in the debtors’ efforts to preserve their businesses as going-concerns and to pave the way to a consensual resolution of these Chapter 11 cases,” a previous motion said.

Walter Energy, a metallurgical coal producer based in Birmingham, Ala., filed for bankruptcy on July 1.

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