Hartshorne receives confirmation of Chapter 11 plan of liquidation

By Sarah Lizee

Olympia, Wash., Feb. 19 – Hartshorne Holdings, LLC’s amended joint Chapter 11 plan of liquidation was confirmed, according to an order filed Wednesday with the U.S. Bankruptcy Court for the Western District of Kentucky.

Under the plan, holders of priority claims will be paid in full in cash.

On the effective date, the secured lenders will be paid one lump sum payment of $300,000 in cash from the estates, which payment will be in full and complete satisfaction of all claims held by the secured lenders and SP2.

Upon receipt of the cash payment, the secured lenders’ and SP2’s pre-petition and post-petition liens, security interests, mortgages, claims and interests will be fully satisfied, released and expunged with prejudice; provided however that the secured lenders settlement does not affect the secured lenders’ or SP2’s claims against Paringa Resources Ltd. or any other obligor or guarantor (besides the debtors and their estates) under the pre-petition term loan agreement; and further provided, however, that this release will not act to extinguish or release the royalty interest giving rise to the SP2 claims.

Holders of general unsecured claims will receive their pro rata share of the proceeds of the liquidation trust in excess of any amounts necessary to pay all permissible liquidation trustee fees and expenses, provided that the proceeds will only be available for payment of allowed general unsecured claims to the extent that the liquidation trustee has paid in full or fully reserved for, all the carve-out escrow, the post-petition fee escrow, U.S. trustee fees, allowed general administrative expense claims, allowed priority tax claims, allowed priority claims, allowed secured lenders claims, and allowed other secured claims. Holders of general unsecured claims will also receive their pro rata share of a committee settlement, if approved by the court.

Interests and intercompany claims will be canceled with no distribution.

The plan distributions will be funded from the debtors’ cash on hand and applicable sale proceeds.

Rumsey, Ky.-based Hartshorne develops and operates coal mining projects in the United States. The company filed bankruptcy on Feb. 20, 2020 under Chapter 11 case number 20-40133.

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