Murray Energy Holdings: Consol objects to new plan of reorganization

By Caroline Salls

Pittsburgh, Aug. 21 – Murray Energy Holdings Co. creditor Consol Energy Inc. objected to the confirmation of the company’s proposed plan of reorganization, according to a Friday filing with the U.S. Bankruptcy Court for the Southern District of Ohio.

After the Murray debtors spent nearly two months negotiating with its official committee of unsecured creditors, an informal debtholder group and insiders including the Murray family, but “keeping everyone else in the dark about the new terms in the plan,” Consol said a new plan was filed on July 24 and amended on Aug. 6.

“After taking the time needed to negotiate their new agreements, the debtors then demanded expedited consideration of their new plan and have resisted legitimate efforts to obtain information about key aspects of the new plan,” the objection said.

“But despite the time taken to negotiate new deals, the debtors’ new plan, like its old plan, still does not comply with the Bankruptcy Code or other applicable law and cannot be confirmed.”

Specifically, Consol said the new plan’s proposed releases are too broad and not necessary, the plan is not feasible, Murray’s proposed sale transaction impermissibly attempts to sell its assets free and clear of Consol’s overriding royalty interests and the plan attempts to deem any class for which holders were eligible to vote, but did not vote, to have accepted the new plan.

In addition, Consol said the plan provisions call for “cherry picking” some executory contracts and unexpired leases with Consol for assumption and rejection, even though they must all be assumed or rejected as one and in their entirety.

Consol said Murray also cannot prove that creditors would fare better under the new plan than in a liquidation and that creditors were not given a meaningful opportunity to review the new plan and determine how to vote.

Murray Energy is a Saint Clairsville, Ohio, coal company. The company filed bankruptcy on Oct. 29, 2019 under Chapter 11 case number 19-56885.

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