Creditors seek to force coal operator Frasure Creek Mining into bankruptcy
Rob Goodwin
Several creditors of Appalachia coal producer Frasure Creek Mining LLC have filed an involuntary petition to force the company to restructure in federal bankruptcy court.
The petition was filed Feb. 14 in the U.S. Bankruptcy Court for the Eastern District of Kentucky by Cleveland-based Austin Powder Co.; Charleston, W.Va.-based Cecil I. Walker Machinery Co. Inc.; and Louisville, Ky.-based Whayne Supply Co.
Austin Powder is claiming it is owed $11.9 million for the sales of goods. Whayne Supply has filed a claim of $5.3 million for sales of services and parts, and Cecil I. Walker reported a claim of $2.9 million for the sales of services and parts, according to the petition.
The involuntary Chapter 11 petition also names as debtors Trinity Coal Co. and Essar Minerals.
On Feb. 15, the bankruptcy court issued a summons to Frasure Creek ordering it to respond to the petition within 21 days.
Bankruptcy rumors have swirled around Frasure Creek since early 2012, when its Trinity Coal Corp. unit said a terminated coal supply agreement with South Carolina Public Service Authority forced it to idle operations and lay off workers. The company said the contract cancellation might force it to file for bankruptcy.
In April 2012, Frasure Creek
laid
off more than 300 miners at its Perry County, Ky., mining operations.
And later that year, it began selling
more than 180 pieces of mining equipment at auction. Company officials told The Register-Herald of Beckley, W.Va., that
they had temporarily shut down operations in Fayette County, W.Va., at the
request of a buyer. They said, however, that the scale of operations had not
been changed and that bankruptcy is not part of the company's current
plan.
David Stetson, Trinity's chief of restructuring, would not comment on rumors that the company might be sold or restructured.
Frasure Creek has been trying
to settle a complaint by environmentalists over water pollution at its mines,
but citizens groups have objected to what they call "back room" negotiations
between the company and state environmental
officials.
Frasure Creek and Trinity
are owned
by India-based conglomerate Essar
Group.
A representative for Essar Group could not immediately be reached for comment.
The U.S. Mine Safety and Health Administration shows Frasure Creek as operator of several mines in Kentucky and West Virginia. Its No. 6 surface mine in Perry County produced 532,987 tons of coal in 2012. Its No. 8 surface mine in Perry County produced 181,700 tons of coal in 2012. And its No. 5 surface mine in Fayette County, W.Va., produced 553,691 tons in 2012.
Erin Savage
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Erin Savage
Water Quality Specialist
Appalachian Voices
828.262.1500
