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James River eyes strategic $4 million sale ‘integral’ to restructuring
By Kali Hays
New York, Aug. 21 – As part of its restructuring James River Coal Co. requested court approval for debtor Leeco, Inc. to purchase real property, equipment and other assets located in Perry County, Ky., from EQT Gathering, LLC for $4 million, according to a Thursday motion with the U.S. Bankruptcy Court for the Eastern District of Virginia.
The $4 million purchase price will be made in four installments of $1 million each, the first two of which will be paid by Leeco, with the remaining payments to be paid by Blackhawk Mining, LLC.
Blackhawk is the parent company of JR Acquisition, LLC which James River selected as the successful bidder for three of the company’s mining complexes located in West Virginia, Kentucky and Indiana for the purchase price of $52 million.
James River said Leeco’s “purchase of the assets and first installment payments are an integral part of larger efforts to consummate a strategic restructuring transaction and in fact required by the successful bid,” according to the motion.
Under the asset purchase agreement between James River and Blackhawk for the mining assets, it is required that James River assign a debtor to enter into the purchase agreement to supply funding for initial payments.
James River said its debtor-in-possession agent Cantor Fitzgerald Securities has consented to Leeco entering the purchase agreement and that if the court does not approve the purchase by Aug. 31, the agreement may be terminated by either party involved.
James River, a coal company based in Richmond, Va., filed bankruptcy on April 7. The Chapter 11 case number is 14-31848.
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