Dominion Black Warrior Trust termination process could go into 2017

By Caroline Salls

Pittsburgh, Jan. 27 – The Dominion Resources Black Warrior Trust’s termination process may continue into early 2017 as a result of the trust’s involvement in various appeals of rulings made in Walter Energy, Inc.’s bankruptcy case, according to a trust news release.

Specifically, the trust said it is appealing the order issued on Dec. 28 by the U.S. Bankruptcy Court for the Northern District of Alabama rejecting specified overriding royalty conveyances as executory contracts, the trust agreement and a related administrative services agreement.

The trust is also appealing a cash management order issued on July 15, 2015, an order denying reconsideration of the cash management order and a final cash collateral order originally issued on Sept. 28.

If it is successful on the appeals and receives value for the royalty interests through the termination procedures of the trust agreement, the trust said it is possible, to the extent the assets of the trust then exceed the liabilities, that it would be able to make a distribution to trust unitholders.

In addition, the trust said it was notified on Jan. 5 by the New York Stock Exchange that the NYSE would begin proceedings to delist the trust’s beneficial interest units.

As a result of the termination of the trust, the NYSE determined that the trust could no longer affirm an intent to cure its noncompliance with the exchange’s continued listing standards, which require an average closing price of $1.00 per unit over a 30-trading-day period.

The trust said the NYSE reported the removal of the trust from listing to the Securities and Exchange Commission on Jan. 21. The trust intends to file a notice with the SEC on Feb. 1 of the suspension of its duty to file periodic reports.

The trust’s units are currently being traded on the over-the-counter markets under the symbol DOMR, the release said.

As previously reported, the trust will terminate as a result of the failure to maintain a 1.2 to 1.0 ratio for two consecutive calendar quarters of cash received under trust royalty interests to administrative costs.

According to the release, the royalty interests in question are overriding royalty interests in the proved natural gas properties located in the Pottsville coal formation of the Black Warrior Basin in Tuscaloosa County, Ala.

The trust said Walter Energy did not pay either the distribution to the trust that would have typically been paid in August and normally would have included payments for the royalty interests sold during the production months of April 2015, May 2015 and June 2015 or the distribution to the trust that would have typically been paid in December and normally would have included payments for the royalty interests sold during the production months of July, August and September.

Walter Energy is the parent of Walter Black Warrior Basin LLC. Birmingham, Ala.-based Walter Energy is a metallurgical coal producer that filed for bankruptcy on July 15, 2015 under Chapter 11 case number 15-02741.

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