Owners of Bel Ayr, Eagle Butte Mines in Campbell County Face Possible Liquidation
Blackjewel LLC, which operates Eagle Butte and Belle Ayr mines near Gillette, is participating in an emergency meeting Tuesday afternoon in U.S. Bankruptcy Court for the Southern District of West Virginia in a last-ditch effort to save the company including 1,700 jobs, according to court records.
Blackjewel announced Monday that it could not get a $20 million loan from creditor United Bank, and filed for Chapter 11 bankruptcy business reorganization, which keeps a company's creditors at bay while it continues to operate and resolve its financial problems.
So Blackjewel LLC and the other debtors -- Blackjewel Holdings LLC, Revelation Energy Holdings LLC, Revelation Management Corp., Revelation Energy, LLC -- have come up with a proposal for $20 million in emergency funding to at least keep the company running.
Otherwise, it will be forced to convert the bankruptcy to Chapter 7, which means the liquidation of the company, according to a request for an emergency hearing in U.S. Bankruptcy Court.
"If these Debtors convert to chapter 7, the mines will be abandoned, equipment will be stolen or destroyed and the value of the Debtors' assets will be devastated," according to Blackjewel.
Besides the abandonment and destruction of the property, Chapter 7 will result in the loss of 1,700 jobs throughout the company in Wyoming and West Virginia, according to Blackjewel's motion for the emergency meeting.
The emergency $20 million funding would be through debtor-in-possession financing, which is a form of financing for companies in distress in which the current management and board of directors remain in possession of the company's assets. The request for the relief from the bankruptcy court would include liens and security interest on Blackjewel LLC property and a loan from a new third party that would receive approval by no later than Wednesday.
These sources aren't certain, but Blackjewel said it believes the proposed financing scheme is reasonable, according to its court filing Tuesday. "Given the alternatives here, no other choice seems viable."