Kentucky is almost as well known for its coal as for its horses. The coal industry has a long history in the state, with miners and mining towns having grown up in the mountains that make up a good portion of Kentucky’s beautiful topography. Unfortunately, like in other areas of the country, cheaper natural gas is making it more difficult for companies that mine the carbon-based rock to compete in the energy marketplace.
For example, in a recent filing with Securities and Exchange Commission, a company called Armstrong Energy that operates several mines that produce thermal coal in the western part of Kentucky has said that it is in danger of filing for bankruptcy. Citing a loss in the second quarter of the year of over $17 million, Armstrong has said that it is considering a voluntary Chapter 11 filing in order to reorganize its debts and attempt to avoid being forced into an involuntary Chapter 11 or even a liquidation by its creditors.
By doing this, the company likely hopes that it can restructure its operations and come to an agreement with those to whom it owes money on a plan to make payments and continue to operate its underground and surface mines in the state. With the company in default on at least one note that required an interest payment of $11.75 million, the time may be coming where Armstrong has little choice but to turn to the bankruptcy courts for relief.
The main difference between business bankruptcies and personal ones, especially in the case of large companies like Armstrong, is that most business bankruptcies do not end in the liquidation of the companies’ assets. Many corporations, large and small, have taken advantage of the restructuring that is possible under a Chapter 11 filing to continue doing business and came out on the other side in a healthier economic state.
Source: stltoday.com, “Clayton-based Armstrong Energy warns it may file for bankruptcy protection,” Bryce Grey, Aug 14, 2017
