James River Coal looks to sell certain mining assets for $3.55 million

By Kali Hays

New York, May 27 - James River Coal Co. is seeking court approval of two sale agreements related to certain assets of its idled McCoy Elkhorn mining complex to Opes Resources, Inc. and Marshall Resources, Inc., according to a May 23 motion with the U.S. Bankruptcy Court for the Eastern District of Virginia.

Specifically, Opes agreed to pay the company $3.1 million in cash and will assume substantially all liabilities related to the purchased assets estimated to be in the amount of $6.73 million.

Marshall Resources will pay the company $444,970 in cash and assume all related liabilities estimated to be in the amount of $2.24 million, according to the motion.

The assets being sold include all rights, titles and interest in the mining complex but exclude various government licenses and authorizations.

The company said it believes the sale to Opes and Marshall Resources "will realize a greater value for the assets than could be realized through an auction."

According to the motion, the sale will save the company roughly $1 million in monthly expenses and is an "important component of the debtors' strategic transaction process to further the goal of maximizing recovery while they continue to pursue a dual-track restructuring process for the sale of core assets or a reorganization."

If James River receives a proposal on any of the McCoy assets before May 30 that is more favorable, it may terminate either asset purchase agreement.

James River, a coal company based in Richmond, Va., filed for bankruptcy on April 7 under Chapter 11 case number 14-31848.

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