U.S. Government: Alpha Sale Ignores Environmental
Post# of 61
Posted On: 02/22/2016 12:45:16 PM
U.S. Government: Alpha Sale Ignores Environmental Obligations
DOW JONES & COMPANY, INC. 12:42 PM ET 2/22/2016
The U.S. government fears Alpha Natural Resources Inc.'s(ANRZQ) proposal to sell its "crown jewel assets" to its lenders won't provide for cleaning up pollution at Alpha's mines, posing a "serious threat to public health and safety."
The coal miner's plan to sell key assets to its lenders, whose $500 million bid Alpha wants to test through an auction process, has drawn some two dozen bankruptcy-court filings from creditors raising various concerns with the proposal or objecting outright.
Among them is the federal government. The lenders' so-called credit bid---that is, not hard cash but rather a pledge to forgive $500 million in debt they are owed---puts Alpha at risk of becoming unable to comply with its obligations to reclaim the land and treat the water at its mines, the government said.
"Allowing such a sale to go forward without consideration of the impact on debtors' overall operations may pose a serious threat to public health and safety in coal mining communities across the United States," government lawyers said in papers filed Friday.
Government lawyers added that filing for bankruptcy doesn't allow a company to evade its environmental obligations, which are a condition of coal-mining permits. Echoing this concern in court filings of their own are regulators in Illinois, Virginia and West Virginia, some of the states where Alpha has mines, as well as private environmental groups like the Sierra Club.
In an objection filed Friday, Alpha's retirees say the sale proposal is unfairly designed to give lenders an edge over would-be rival bidders. The lenders' apparent ability to increase their credit bid to up to $1.1 billion in debt forgiveness, among other components of Alpha's proposal, won't just chill the auction process but are an "Arctic blast," the retirees said.
Another objection comes from the Pension Benefit Guaranty Corp., the federal government's insurer of private pensions. The agency says the auction proposal isn't designed "to obtain maximum value" for Alpha's assets because it doesn't require a buyer to take responsibility for Alpha's pension plans.
A hearing on Alpha's auction proposal that was scheduled for Tuesday has been pushed off until March 3, according to court papers.
In prior court filings, Alpha said the lenders' bid is "central" to its ability to quickly wrap up its chapter 11 case amid "continued adverse market conditions and ongoing cash losses of the debtors' businesses."
Alpha said unlike traditional bankruptcy auction proposals, it isn't seeking any bid protections for the lenders, like a breakup fee or reimbursement of its sale-related expenses.
In addition to the sale, Alpha is preparing a chapter 11 plan to distribute any sale proceeds to creditors and address any assets that go unsold.
Based in Bristol, Va., Alpha's operations span Wyoming'sPowder River Basin and northern and central Appalachia. The company sought chapter 11 protection on Aug. 3.
(Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection. Go to http://dbr.dowjones.com)
Write to Jacqueline Palank at jacqueline.palank@wsj.com.
(END) Dow Jones Newswires
02-22-161242ET
Copyright (c) 2016 Dow Jones & Company, Inc.
DOW JONES & COMPANY, INC. 12:42 PM ET 2/22/2016
The U.S. government fears Alpha Natural Resources Inc.'s(ANRZQ) proposal to sell its "crown jewel assets" to its lenders won't provide for cleaning up pollution at Alpha's mines, posing a "serious threat to public health and safety."
The coal miner's plan to sell key assets to its lenders, whose $500 million bid Alpha wants to test through an auction process, has drawn some two dozen bankruptcy-court filings from creditors raising various concerns with the proposal or objecting outright.
Among them is the federal government. The lenders' so-called credit bid---that is, not hard cash but rather a pledge to forgive $500 million in debt they are owed---puts Alpha at risk of becoming unable to comply with its obligations to reclaim the land and treat the water at its mines, the government said.
"Allowing such a sale to go forward without consideration of the impact on debtors' overall operations may pose a serious threat to public health and safety in coal mining communities across the United States," government lawyers said in papers filed Friday.
Government lawyers added that filing for bankruptcy doesn't allow a company to evade its environmental obligations, which are a condition of coal-mining permits. Echoing this concern in court filings of their own are regulators in Illinois, Virginia and West Virginia, some of the states where Alpha has mines, as well as private environmental groups like the Sierra Club.
In an objection filed Friday, Alpha's retirees say the sale proposal is unfairly designed to give lenders an edge over would-be rival bidders. The lenders' apparent ability to increase their credit bid to up to $1.1 billion in debt forgiveness, among other components of Alpha's proposal, won't just chill the auction process but are an "Arctic blast," the retirees said.
Another objection comes from the Pension Benefit Guaranty Corp., the federal government's insurer of private pensions. The agency says the auction proposal isn't designed "to obtain maximum value" for Alpha's assets because it doesn't require a buyer to take responsibility for Alpha's pension plans.
A hearing on Alpha's auction proposal that was scheduled for Tuesday has been pushed off until March 3, according to court papers.
In prior court filings, Alpha said the lenders' bid is "central" to its ability to quickly wrap up its chapter 11 case amid "continued adverse market conditions and ongoing cash losses of the debtors' businesses."
Alpha said unlike traditional bankruptcy auction proposals, it isn't seeking any bid protections for the lenders, like a breakup fee or reimbursement of its sale-related expenses.
In addition to the sale, Alpha is preparing a chapter 11 plan to distribute any sale proceeds to creditors and address any assets that go unsold.
Based in Bristol, Va., Alpha's operations span Wyoming'sPowder River Basin and northern and central Appalachia. The company sought chapter 11 protection on Aug. 3.
(Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection. Go to http://dbr.dowjones.com)
Write to Jacqueline Palank at jacqueline.palank@wsj.com.
(END) Dow Jones Newswires
02-22-161242ET
Copyright (c) 2016 Dow Jones & Company, Inc.
(0)
(0)