Murray Energy U.S. Trustee: disclosure statement lacks key details

By Caroline Salls

Pittsburgh, April 8 – The U.S. Trustee overseeing Murray Energy Holdings Co. objected to the disclosure statement for the company’s proposed plan of reorganization, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of Ohio.

Regions 3 and 9 U.S. trustee Andrew R. Vara said in his objection that the disclosure statement does not include adequate information to allow a creditor or interest holder to make an informed judgment regarding whether to vote in favor of the first amended plan.

Specifically, Vara said the disclosure statement does not contain enough information regarding the legal basis for Murray’s belief that the plan is confirmable “with problematic provisions such as (i) non-consensual third-party releases for the benefit of the released parties and (ii) an overly-inclusive definition of exculpated parties covered by the exculpation provisions.”

In addition, Vara said the disclosure statement does not include any information on why impaired classes are entitled to vote on the plan but must affirmatively opt out of some releases even when rejecting the plan.

The U.S. Trustee also said to the extent the company is seeking court approval of a management incentive plan referenced in the amended Chapter 11 plan, the disclosure statement fails to describe the management incentive plan or explain how it satisfies Bankruptcy Code requirements.

Murray Energy is a Saint Clairsville, Ohio, coal company. The company filed bankruptcy on Oct. 29 under Chapter 11 case number 19-56885.

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