Kentucky Coal Company Clintwood JOD Files for Bankruptcy
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The Pike County coal company that furloughed and laid off workers earlier this month has filed for Chapter 11 bankruptcy.
Collections against Clintwood JOD LLC, which operates coal mines in Virginia and Eastern Kentucky, were temporarily frozen by a federal bankruptcy judge Monday, giving the company an opportunity to restructure its debts while it remains operating.
An affiliate mineral properties firm filed for bankruptcy alongside Clintwood JOD.
Clintwood JOD has more than 100 employees, according to state business records. That would usually require written notice 60 days before mass layoffs, but the company appears to be shielding itself under a waiver for unforeseeable circumstances. Temporary furlough letters employees first began posting on social media late last month were quickly replaced by permanent layoff notices in early March.
It remains unclear how many employees are affected by the layoffs.
The company, which reported assets ranging between $100 million and $500 million, faces more than $60 million in liabilities, according to court documents filed this week. Among the list of creditors owed are a New Jersey-based hedge fund with a $26.6 million stake in the company, $8.9 million tied up in equipment costs to a financial services broker, and $3.4 million the company owes Kentucky in coal severance taxes.
More than 300 creditors were alerted in the company’s petition. Officials who signed the petition said they do not expect funds will be available for unsecured creditors once the company has reorganized its debts. A creditors meeting has been scheduled for April 16.
The company could not immediately be reached for comment Tuesday.
Rising production costs and intense competition from natural gas prices that have dropped significantly since the outset of fracking operations in and around Texas and Pennsylvania basins has precipitated a 50 percent coal production decline nationwide since 2008. President Donald Trump’s promises to revive the industry by propping up coal-fired plants and juicing domestic steel production have so far fallen short.
Source: Lexington Herald Leader
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