Blackjewel LLC, the owner of the Belle Ayr and Eagle Butte mines in Campbell County that shut down and sent their nearly 700 workers home Monday, lost their last-ditch attempt for a refinance proposal to save the company during a hearing in a Bankruptcy Court early Wednesday morning.

That may mean it may file Chapter 7 liquidation bankruptcy to shut down the mines in Wyoming and West Virginia and lay off 1,700 workers nationwide.

"The debtors have not satisfied their burden of proof under Section 364d," said Judge Frank Volk of the U.S. Bankruptcy Court of the Southern District of West Virginia in the audio recording at the end of a five-and-a-half hour hearing."

"Moreover, I have not found the proposed terms of the debt facility would unduly prejudice the rights of other parties and interests, the majority of which have not had an opportunity to be heard given the unusual circumstances that have been presented," Volk said.

Volk urged the parties to the Blackjewel LLC and four related debtors, and creditors and financial interests to continue their negotiations to preserve as much of the company as possible.

"I do not believe you have exhausted all available alternatives, and I say that not only as debtor-in-possession, but to everyone I have heard from today, so I would encourage you in the hours through the evening or the morning now as they transpire to continue your discussion," Volk said.

"I hope they will bear fruit, but the court is constrained on the present record on the laws that exist and the findings of fact that support the ruling that I will later explicate to deny the motion, and that is the court ruling and the court is in recess," he said.

Blackjewel filed for Chapter 11 bankruptcy business reorganization after it unsuccessfully attempted to obtain $20 million financing to keep the company running.