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Bill addresses pensions, health care for miners, retirees

Source: WHSV

November 6, 2019

CHARLESTON, W.Va. (AP) — Senate Majority Leader Mitch McConnell is co-sponsoring a bill with West Virginia’s two U.S. senators and others aimed at preserving the pensions of about 92,000 retired coal miners, as well as the health-care benefits of another 13,000 working miners.

Democrat Joe Manchin and Republican Shelley Moore Capito of West Virginia announced the bill Wednesday.

McConnell, a Kentucky Republican, said in the statement that he raised the issue of protecting miner pensions and health benefits with President Donald Trump this week, and is “committed to continuing to work with him and my colleagues” toward a solution.

The bill would transfer surplus money from the Abandoned Mine Land fund to prevent the insolvency of a 1974 miners’ pension plan. It also would add coal company bankruptcies from 2018 and 2019 to health-care legislation that passed in 2017.

Manchin said on a conference call that McConnell’s support “helps us get a guaranteed vote, I would think. He knew it was time to do it. I think he understands the longer we wait, the more it costs and makes it harder to do.”

In the past, Manchin and the United Mine Workers of America have been critical of McConnell for blocking votes to secure the pensions and health benefits.

“With this one bill, the United States Senate has taken a giant, bipartisan step forward in keeping America’s promise to our coal miners and their families,” UMW President Cecil Roberts said in a statement. “I am especially thankful for Leader McConnell’s support of this legislation. His voice on behalf of retired miners is critical, and I want to thank him on behalf of every retired miner in America.”

Manchin said Ohio-based Murray Energy’s Chapter 11 bankruptcy filing last week accelerated the urgency of getting the bill passed and signed before the end of the year.

“We need to get this done as soon as possible to prevent anyone from losing their pensions or their health care,” Manchin said.

Murray Energy joined a growing list of struggling mining companies as utilities switch from coal to cheaper and less-polluting renewable energy or natural gas. Murray Energy, which has operations in seven U.S. states, was the fourth largest U.S. coal producer in 2018, accounting for 6% of total production, according to the Energy Information Administration.

In the western United States, three of the Powder River Basin’s nine producers — Colorado’s Westmoreland Coal, Wyoming’s Cloud Peak Energy and West Virginia-based Blackjewel — have filed for bankruptcy protection over the past year. St. Louis-based Peabody Energy Corp. emerged from bankruptcy protection in 2017 and both St. Louis-based Arch Coal and Bristol, Virginia-based Alpha emerged in 2016.

Written by: John Raby

‘Nervous and scared.’ Coal workers fear for pensions after Murray Energy bankruptcy

Source: CNN

November 1, 2019

New York (CNN Business) – Tom Kacsmar worked underground at a coal mine for nearly four decades. The promise of a decent pension and healthcare for life kept him at this dangerous job. Now, Kacsmar fears those benefits will get washed away by the bankruptcy of Murray Energy, America’s largest private coal mining company.

“I was a proud, hard-working coal miner my entire life. With the stroke of a pen, they’re going to cut my healthcare,” the 76-year-old retiree told CNN Business.

Kacsmar never worked a day for Murray Energy, the mining giant founded by coal king Robert Murray. But like countless other retirees, the fate of his benefits is inextricably linked to the company, which is seeking to “dramatically” slash its liabilities, including $8 billion of pension and retiree healthcare obligations.

Murray built his empire by gobbling up smaller miners, including the Ohio company Kacsmar used to work for.
“I was led to believe that if I did my job, I would have a pension and healthcare for the rest of my life,” Kacsmar said. “There is something wrong with the laws in this country that put the employees last in line to receive anything.”

Murray Energy is the last major funder of industry pension plan

Like many of its bankrupt rivals, Murray Energy is widely expected to make the case that those benefits need to get dialed back for the company to survive.

That would have far-reaching consequences because Murray Energy is the last major company contributing to the United Mine Workers of America’s pension plan. That plan provides pension benefits to about 87,000 retired miners and surviving spouses, who collect an average monthly pension of about $600.

George Shultz retired a decade ago from Consul Energy, a company later acquired by Murray Energy.
Now the 69-year-old worries his pension will get gutted, potentially costing him his home.

Current and former Murray Energy employees told CNN Business they are bracing for cuts.

“I’m really worried. I know they are going to wipe away my pension,” said Ryan Cottrell, a father of two who works at a West Virginia coal mine owned by Murray Energy. “This bankruptcy is clearly to strip pensions and retirees’ benefits.”

George Shultz bought a house with his wife when he retired in 2009 from Consul Energy, one of the companies acquired by Murray.

“If I lose that pension, I’m going to lose that house,” said Shultz, whose wife recently passed away.

Coal is getting crushed

The bankruptcy of Murray Energy puts an exclamation point on the stunning downfall of America’s coal industry. Despite President Donald Trump’s promise to revive coal country, the shift towardnatural gas and renewable energy has only accelerated.

US power plants are expected to consume less coal next year than at any point since Jimmy Carter was in the White House, according to projections by the federal government.

“Although Murray has been able to outlast many of its competitors, mounting debt and legacy liability expenses have become too heavy of a burden to sustain under current industry conditions,” Robert Moore, the company’s incoming CEO, argued in court documents. “The company has exhausted all options and liquidity.”

Murray Energy declined to comment on what will happen to worker pensions, but legal experts say retirees and workers have reason to worry.

Murray Energy “will seek to eliminate or reject the collective bargaining agreement as well as any obligations to fund retirement medical benefits,” said Gregory Plotko, an attorney at Richards Kibbe & Orbe who represented the union and other creditors in the Patriot Coal bankruptcy.

Coal miners can’t rely on the Pension Benefit Guaranty Corporation, the federal agency created in the 1970s to protect worker retirement plans.That’s because the PBGC is not required to cover 100% of multiemployer pension plans like the coal industry’s. And in any case, the agency doesn’t have the funding to do so. The PBGC projects that its program will run out of cash by the end of 2025.

Lawmakers in Congress have been debating for years how to reform this safety net before it becomes insolvent.

‘Nervous and scared’

Bankruptcy courts have in the past allowed coal companies to shed those expenses — a point that Murray Energy didn’t shy away from noting in its court filings.

“Competitors have used bankruptcy to reduce debt and lower their cost structures by eliminating cash interest obligations and pension and benefit obligations, leaving them better positioned to compete for volume and pricing in the current market,” Murray Energy said in court documents.

The company emphasized that it doesn’t take this process lightly.

“Murray’s employees are its lifeblood and Murray has a longstanding history and valued partnership with their unions,” the company said.

Ryan Cottrell, a West Virginia coal miner who works at Murray Energy, with his wife Kendra, son Hunter and daughter Harper.

However, Murray Energy’s lawyers said the company is “simply not able to repay” its liabilities, including its “outsized” pension and retiree healthcare obligations. The mining giant argued it must slash its liabilities to attract the capital needed to fund future operations.

Current and former coal miners expressed frustration at the situation, especially because they took less pay during previous contract negotiations in order to protect their pensions.

“People are nervous and scared. They don’t know what to do,” said Gary Campbell, who works at a West Virginia coal mine owned by Murray Energy. “Why is there no help for us? Why is everyone piling on the coal industry? It seems like we take it on the chin, again and again.”

Pressure on lawmakers for solution

Sheila Slocum Hollis, a partner and energy specialist in the law firm Duane Morris, warned that the impact of these coal bankruptcies can be “extremely devastating” on local communities. Property values plunge, even as the strain on resources rises.

“The country owes these people a lot for the sacrifices they’ve made and the risks they’ve taken,” Hollis said. “If the company isn’t there because of the bankruptcy, somebody needs to step up to help the people left high and dry.”

In this case, even coal miners who never worked for companies related to Murray Energy could be affected. After a wave of bankruptcies over the past decade, Murray Energy is the last man standing funding the union pension plan, which is known as the 1974 Pension Plan. Murray Energy helps fund pensions for people who worked for other bankrupt coal companies but still rely on that industry pension plan.

The company estimates it funds a “staggering” 97% of the plan’s total contributions, totaling $15 million in 2018 alone.

“If Murray stops contributing, the pension plan will be unable to pay out benefits to all of its members,” said Plotko, the lawyer.

Murray Energy said in court documents that if it withdraws from the plan, it would be on the hook for $6.4 billion — an amount the company almost certainly can’t afford.

Senator Sherrod Brown, the Ohio Democrat, said in a statement that the Murray Energy bankruptcy “intensifies the urgent need for a comprehensive solution to the imminent pension crisis.”

Brown pledged to work with lawmakers to find a bipartisan solution to “get the job done for these workers who have worked so hard for this country.”

‘Poor management’

The rise of Murray Energy was made possible by the misfortunes of its rivals. The company made a string of purchases of struggling companies, including Consul Energy, Foresight Energy, Armstrong Energy and assets in Colombia.

“Throughout the downturn, Murray has capitalized on opportunities to make value-accretive asset acquisitions,” the company said in its bankruptcy documents.

Those deals, Murray argues, boosted earnings and gave the company additional assets to pledge to creditors to refinance debt.

Murray Energy coal mine worker Ryan Cottrell.

However, doubling down on the coal industry also further exposed the company to the same challenges facing all miners. And it added stress to Murray’s balance sheet, which the company admits is saddled with “mounting debt” and hefty interest payments.

Some workers argue that empire-building strategy backfired.

“Honestly, he got too big for his britches,” said Cottrell, one of the West Virginia miners. “We ended up in bankruptcy because of poor management.”

Murray Energy ‘exhausted’ alternatives, joins coal peers in bankruptcy filing

Source: S&P Global Market Intelligence

October 30, 2019

Despite its efforts to avoid what its founder once called the “bankruptcy sewer,” Murray Energy Corp.’s parent Murray Energy Holdings Co. followed the path blazed by many of its peers with an Oct. 29 petition for a Chapter 11 bankruptcy reorganization.

The largest privately-held coal producer in the U.S. recorded $542.3 million in EBITDA in 2018 but faces more than $8 billion in potential and actual legacy liabilities alongside $2.7 billion in outstanding funded debt obligations costing the company $298 million in debt expenses annually. In a bid to keep the company operating, Murray Energy filed a voluntary petition for bankruptcy in the U.S. Bankruptcy Court for the Southern District of Ohio.

Former Murray Energy President and CEO Robert Murray, who is being replaced at the company by Foresight Energy LP President and CEO Robert Moore as part of the reorganization, frequently cited the added stress placed on the coal market by the number of companies filing for bankruptcy and discharging their financial obligations. Of the top five coal producers in the U.S. by volume in 2018, only Alliance Resource Partners LP has not been forced to file bankruptcy in recent years.

“There simply are no creative management solutions, operational improvements, or strategic or financial options remaining, even for Murray; the company has exhausted all options and liquidity,” Moore wrote in a bankruptcy declaration.

Foresight is an affiliate of Murray Energy but was not part of the bankruptcy filing.

Moore pointed to the closure of 93 GW of coal-fired power generation in the U.S, the rise of inexpensive natural gas and the growth of wind and solar energy, an overall decline in electricity demand, recent utility companies’ bankruptcy filings and changes in legislative priorities as significant factors deteriorating the market for thermal coal.

“What we’ve seen over the last decades since thermal coal has peaked is significant erosion in demand,” said Benjamin Nelson, senior credit officer and lead coal analyst at Moody’s. “We think that continues out into the next decade with about half of what’s left disappearing over that horizon.”

Meanwhile, along with the rest of the industry, Murray is struggling with deteriorating export markets that Nelson said are showing no signs of turning around soon.

Expanding in coal

In 2014, Murray vowed to be the “last man standing” in coal. In a 2016 interview with S&P Global Market Intelligence, he laid out a plan to keep the “best coal company in the world” out of bankruptcy, but only a few months later reported the company was again on the brink when one of its customers filed for bankruptcy.

Murray Energy grew its thermal coal footprint considerably in recent years — becoming the third-largest producer of U.S. coal along the way —by making large acquisitions of mines from coal companies such as Consol Energy Inc., Armstrong Energy Inc. and Foresight Energy. The company also recently ventured into the metallurgical coal space, taking on assets from Mission Coal Company LLCs bankruptcy reorganization.

The company succeeded for some time, even “outrunning” the industry downturn, Moore wrote. However, the debt and obligations accumulated by the company became too much.

“It’s primarily because of the quality of their assets and they’re low-cost that kept them profitable for a long time,” S&P Global Ratings analyst Vania Dimova said. “What was working against them is this huge, big debt load of almost $5 billion.”

However, Moore wrote that the acquisitions boosted earnings and gave the company additional assets to pledge to creditors in exchange for extending debt maturities. The company continued to purchase thermal coal mines based on “Mr. Murray’s belief that the energy industry would come to appreciate the potential value of high heat bituminous coal.”

“Murray maintains its belief that longer-term demand for coal is underpinned in the United States by a practical requirement that approximately 25% of the power supplied to the electrical grid come from coal power generation to ensure reliable electricity during cold snaps and heatwaves, when other parts of the grid will be less reliable or overly expensive,” Moore wrote.

Coal accounted for about 23.4% of U.S. power generation in August and about 27.3% of generation year-to-date through August, according to a recent S&P Global Market Intelligence analysis.

Murray will finance its operations through the reorganization with cash on hand and access to a new $350 million debtor in possession financing facility. Under its restructuring support agreement, a group of Murray Energy lenders is forming a new entity to serve as a stalking horse bidder to acquire the company assets.

Murray Energy needs the cash infusion to pay vendors who have seen the company delay payments and stretch payment terms in recent months, according to a bankruptcy court declaration from Robert Campagna, a managing director with Alvarez & Marsal North America LLC.

Worker impact

Ohio-based Murray Energy employs nearly 5,500 people across the U.S., including approximately 2,400 active union employees. United Mine Workers of America International President Cecil Roberts issued a statement on the bankruptcy Oct. 29 saying the reorganization comes as no surprise and suggesting that Murray Energy would likely try to throw out its collective bargaining agreement with the union and discharge its obligations to retirees, their dependents and widows as part of the reorganization.

“Now comes the part where workers and their families pay the price for corporate decision-making and governmental actions,” Roberts said. “We have seen this sad act too many times before.”

News of the bankruptcy prompted Sen. Joe Manchin, D-W.Va., to tweet about legislation that would prioritize workers in bankruptcy reorganizations “because companies like Murray Energy are using the bankruptcy laws to shirk their pension obligations.” Moore wrote in the bankruptcy declaration that while the company’s “employees are its lifeblood,” the myriad of obligations to its employees combined with the cost of servicing its debt has substantially reduced liquidity.

S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.

Stephanie Tsao contributed to this article.

This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.

Written by: Taylor Kuykendall

Robert Murray out as his company files for bankruptcy

Source: E&E News

October 30, 2019

Murray Energy Corp., the largest private coal firm in the country, helmed by an outspoken supporter of President Trump, has filed for federal bankruptcy protection after months of financial trouble in the fraying coal sector.

Robert Murray, who Trump has affectionately called his coal “guy,” will step down as his company’s CEO and president to be chairman of the board of a restructured lender-owned company, under an agreement with an ad hoc group of creditors who hold the majority of Murray’s $1.7 billion in claims.

He is being replaced as CEO by the company’s current chief operating officer and chief financial officer, Robert Moore.

“Bob” Murray is a firebrand CEO, known for his outspoken political activism, fervent GOP support, and run-ins with unions and regulators. His ouster marks the end of an era for the self-made coal baron and media antagonist.

The bankruptcy had been brewing: Murray’s Ohio-based company sought more time on debt payments due earlier this month, a choice that similarly preceded the bankruptcy filing of the Western miner Cloud Peak Energy Inc. earlier this year and the bankruptcy of coal giant Alpha Natural Resources Inc. in 2015 (Greenwire, March 19).

Murray Energy joins seven coal miners, including two large firms in the Western coal sector, to file for bankruptcy.

The ad hoc group of lenders will provide $350 million in debtor-in-possession financing to keep the company operating through the Chapter 11 process.

Coal was king of the U.S. power market as recently as a decade ago, but it has rapidly lost market share to cheap natural gas thanks to hydraulic fracturing and, to a lesser degree, cheap renewable power like wind and solar, experts say.

Struggling to survive

Despite promises from the Trump administration since the 2017 presidential campaign to save coal — a sector then reeling from a sudden market depression — the Murray Energy bankruptcy speaks to the relentless erosion of the market (Energywire, Sept. 6).
The company was the third-largest coal producer by volume last year. It grew where others failed, while the coal market began to shrink. It had a strategy of focusing on economic mines with easy access to plants.

Murray Energy bought up Consol Energy Inc. assets in 2013 for $3.5 billion. More recently, the company pivoted toward an export market to make up for domestic losses, taking on debt to expand its coal empire.

Murray bought a controlling stake in Foresight Energy LP and acquired Armstrong Energy Inc. assets last year in the Illinois Basin, a region favorable for the export market (Greenwire, Jan. 25, 2018).

The company also bought three mines from bankrupt Mission Coal Co. LLC to expand into metallurgical coal, the high-quality coal used to make steel (Greenwire, March 29).
‘No surprise’

Murray employs more union miners than any coal company in the country and as such is the health care supporter for more than 13,000 families, according to United Mine Workers of America President Cecil Roberts.

The bankruptcy spells uncertainty for collective bargaining agreements with workers, which are often overrun by bankruptcy court in favor of cutting burdens on firms trying to emerge from Chapter 11.

Roberts said in a statement today the bankruptcy came as “no surprise,” describing a power sector where government policy favors renewables and a natural gas glut has created sustained low prices.

“Now comes the part where workers and their families pay the price for corporate decision making and government actions,” he said.

Murray’s company is a huge contributor to the UMWA pension fund. House Majority Leader Steny Hoyer (D-Md.) said today he needs to “talk to Richard Neal and Bobby Scott and others to see what steps they think we ought to take,” when asked what Congress should do to further protect miners’ benefits.

Neal, a Massachusetts Democrat, is chairman of the Ways and Means Committee, and Scott, a Virginia Democrat, leads the Education and Labor Committee.

Hoyer, whose comments came during his weekly briefing with reporters, said he didn’t have a specific answer on how to address the potential problem but pledged to make sure retiree benefits are protected.

The union and lawmakers have been working on the issue for years amid numerous bankruptcies. Several bills are pending (Greenwire, Oct. 23).

The Maryland Democrat also said he found the bankruptcy news puzzling given the administration’s repeated promises to boost the coal industry.

“I’m not going to go to where I’m thinking about, in terms of why in heaven’s name would a company that’s selling coal go bankrupt under this administration?” he said.

The company currently carries $8 billion in legacy liabilities, much of that health and pension funds, according to court filings that open a window into the private firm’s financials. It also enters bankruptcy with $2.7 billion in secured debts.

Murray, a well-known figure due to his bombastic personality and outspoken support for the president, has regularly doled out lawsuit threats to journalists and recently sued comedian John Oliver for defamation.

The coal tycoon was also outspoken during and after the 2007 Crandall Canyon mine collapse in Utah that trapped six Murray miners, criticizing the miners’ union and dismissing the Mine Safety and Health Administration’s findings of multiple violations preceding the collapse.

‘Long term success’

Murray said in a statement today that the decision to file for Chapter 11 protection was not an easy one.
“It became necessary to access liquidity and best position Murray Energy and its affiliates for the future of our employees and customers and our long term success,” he said.

Murray tried to stem that tide through policy and political support, lobbying directly to the White House and Energy Secretary Rick Perry (see related story).

But Murray’s close association with the Trump administration could not reverse the trend: Coal has gone from providing half the nation’s electricity to providing little more than a quarter.
The coal-favoring agenda of the White House included revising down regulations that threatened coal such as the emissions-cutting Clean Power Plan and the Mercury and Air Toxics Standards.

Early attempts by the Trump administration to lend coal a helping hand appeared to mirror the direction of Murray’s presidential “action plan” — a list of prewritten executive orders Murray presented to the administration in early 2017 that E&E News obtained through a Freedom of Information Act request. They included a retreat from the Paris climate agreement and a number of deregulatory actions (Greenwire, June 6, 2018).

‘No cards left to play’

Though coal has continued to struggle, Murray has remained an outspoken supporter of the president. He hosted a private fundraiser for the president’s 2020 campaign earlier this year in Wheeling, W.Va., and donated nearly $300,000 personally to the Trump Victory Committee in the most recent reporting period (Greenwire, Oct. 16).
Murray has long lambasted the government for its failure to save the industry, attacking what he often called a “feckless FERC” — referring to the Federal Energy Regulatory Commission — for not creating policies to secure coal’s role as a cornerstone of the power load (Greenwire, Oct. 22).

He has also previously threatened bankruptcy if public policy didn’t intervene. In 2016, Murray blamed President Obama in a notice to 80% of his employees warning of a possible bankruptcy.
Early in the Trump days, he sent a letter to a Trump aide threatening “immediate bankruptcy” if the president did not act to save one of Murray’s customers, the power company FirstEnergy Solutions Corp.

The director of Sierra Club’s Beyond Coal campaign, Mary Anne Hitt, said in a statement today that the Murray Energy bankruptcy was a sign that the coal industry had “no cards left to play” as the power sector continues to move toward green energy.

“As this transition continues, it’s past time for state and federal lawmakers to take action to protect the miners and communities that have long shouldered the industry’s burdens by supporting pensions and investing in a more diverse and robust economy, not bailing out political donors,” she said.
Click here for Murray’s filing in U.S. Bankruptcy Court for the Southern District of Ohio.
Reporter Kellie Lunney contributed.

Written by: Heather Richards

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Murray Energy Holdings Co. Enters Into Restructuring Support Agreement with Members of Ad Hoc Lender Group And Files Chapter 11 To Access $350 Million In New Money DIP Financing

FOR IMMEDIATE RELEASE

October 29, 2019

CONTACT: media@coalsource.com

On October 29, 2019, Murray Energy Holdings Co. (“Murray Energy” or the “Company”) announced that Murray Energy and certain of its subsidiaries entered into a Restructuring Support Agreement (the “RSA”) with an ad hoc lender group (the “Ad Hoc Lender Group”) holding more than 60% of the approximately $1.7 billion in claims under the Company’s Superpriority Credit and Guaranty Agreement.

To implement the RSA, Murray Energy, including certain of its subsidiaries, filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code in the United States Bankruptcy Court for the Southern District of Ohio (the “Bankruptcy Court”) on October 29, 2019 (collectively, the “Chapter 11 Cases”).

Voluntary petitions have also been filed for all of the Company’s main operating subsidiaries, including American Energy Corporation, The Harrison County Coal Company, The Marion County Coal Company, The Marshall County Coal Company, The Monongalia County Coal Company, The Ohio County Coal Company, UtahAmerican Energy, Inc., Murray South America, Inc., The Muhlenberg County Coal Company and The Western Kentucky Coal Company, LLC, which operate mining complexes located in Ohio, West Virginia, Utah, Kentucky and Colombia.

Foresight Energy LP (NYSE: FELP) and Foresight Energy GP LLC, including their direct and indirect subsidiaries, as well as Murray Metallurgical Coal Holdings, LLC, Murray Eagle Mining, LLC, Murray Alabama Minerals, LLC, Murray Maple Eagle Coal, LLC, Murray Alabama Coal, LLC and Murray Oak Grove, LLC did not file voluntary petitions and are not part of the Company’s Chapter 11 Cases.

New Money DIP Financing and RSA Terms

The Company intends to finance its operations throughout Chapter 11 with cash on hand and access to a $350 million new money debtor-in-possession financing facility (the “DIP Facility”), subject to Bankruptcy Court approval. Lenders party to the RSA have committed to provide the full amount of the DIP Facility, and other Lenders under the Company’s Superpriority Credit and Murray Energy Press Release October 29, 2019 Page 2 Guaranty Agreement will be given the opportunity to provide funding under the DIP Facility. The proceeds of the DIP Facility will be used to refinance borrowings under the Company’s existing ABL credit facility and to support ordinary course operations and payments to employees and suppliers throughout the restructuring process.

Under the RSA, the Ad Hoc Lender Group has agreed to form a new entity (“Murray NewCo”) to serve as a “stalking horse bidder” to acquire substantially all of the Company’s assets by credit bidding its debt under a Chapter 11 plan, subject to an overbid process. The RSA contemplates that substantially all of the Company’s prepetition funded debt will be eliminated. The RSA further contemplates that Mr. Robert E. Murray will be named Chairman of the Board of Murray NewCo and Mr. Robert D. Moore will be President and CEO of Murray NewCo. The Company has agreed to comply with certain milestones related to implementing its Chapter 11 plan and related sale process under the DIP Facility and RSA.

Robert D. Moore Named President and CEO

In connection with the RSA and DIP Facility, as of today’s petition date, Mr. Robert D. Moore has been named President and CEO of Murray Energy and Murray Energy Corporation.

Mr. Moore said, “We appreciate the support of our lenders for this process, many of whom have been invested with the Company for a long time. I am confident the DIP Facility provides the Company with adequate liquidity to get payments to our valued trade partners and continue operating in the normal course of business without any anticipated impact to production levels.” Company founder Mr. Robert E. Murray noted, “Although a bankruptcy filing is not an easy decision, it became necessary to access liquidity and best position Murray Energy and its affiliates for the future of our employees and customers and our long term success.”

The Company has filed first day motions with the Bankruptcy Court that when granted will enable day-to-day operations to continue uninterrupted.

Kirkland & Ellis LLP is acting as legal counsel to Murray Energy; Evercore is acting as investment banker; and Alvarez & Marsal is acting as financial advisor.

Davis Polk & Wardwell LLP is acting as legal counsel and Houlihan Lokey Capital, Inc. is acting as investment banker to the Ad Hoc Lender Group.

Additional information, including court filings and other documents related to the reorganization proceedings, will be available on a website administered by the Company’s claims agent, Prime Clerk LLC, at https://cases.primeclerk.com/MurrayEnergy.

Murray Energy Posts Information Provided to Certain Lenders and Bondholders to its Website

The Company has posted certain previously undisclosed material to its website to satisfy its disclosure obligations under confidentiality agreements with certain lenders under its Superpriority Murray Energy Press Release October 29, 2019 Page 3 Credit and Guaranty Agreement, certain lenders under its ABL and FILO credit facilities and certain holders of its second lien notes.

Further inquiries should be directed to media@coalsource.com.

###

Murray Energy declares bankruptcy, shifts founder Bob Murray to board chairman role

Source: WV MetroNews

October 29, 2019

CHARLESTON, W.Va. — Murray Energy, an economic and political powerhouse in West Virginia, has declared bankruptcy.

Under a reorganization proposal, Robert Moore would become president and chief executive of the newly-formed Murray NewCo. Moore has already been executive vice president, chief operating officer and chief financial officer at the company.With the declaration, the company has also announced a change in leadership.

Founder Bob Murray would become chairman of the board.

“Although a bankruptcy filing is not an easy decision, it became necessary to access liquidity and best position Murray Energy and its affiliates for the future of our employees and customers and our long term success,” Bob Murray stated today.

The bankruptcy plan was announced today, but has been rumored for weeks.

Murray Energy announced in early October that it had struck a temporary agreement with lenders after missing debt payments. That agreement was extended until Oct. 28.

At the center of a Chapter 11 bankruptcy filing is a reorganization plan with an ad hoc lender group with more than 60 percent of about $1.7 billion in claims.

Murray intends to continue operations during Chapter 11 with cash on hand plus $350 million new money from the lending group, subject to bankruptcy court approval.

The lender group intends to form a new entity, Murray NewCo, to eventually take over the company.

Voluntary bankruptcy petitions have also been filed for all of the company’s main operating subsidiaries.

Those include American Energy Corporation, The Harrison County Coal Company, The Marion County Coal Company, The Marshall County Coal Company, The Monongalia County Coal Company, The Ohio County Coal Company, UtahAmerican Energy, Inc., Murray South America, Inc., The Muhlenberg County Coal Company and The Western Kentucky Coal Company, LLC, which operate mining complexes located in Ohio, West Virginia, Utah, Kentucky and Colombia.

Not filing voluntary petitions and not part of the company’s Chapter 11 cases were Foresight Energy LP and Foresight Energy GP LLC, including their direct and indirect subsidiaries, as well as Murray Metallurgical Coal Holdings, LLC, Murray Eagle Mining, LLC, Murray Alabama Minerals, LLC, Murray Maple Eagle Coal, LLC, Murray Alabama Coal, LLC and Murray Oak Grove, LLC.

Moore, the incoming president, said he is confident the plan provides adequate liquidity to continue operating normally without affecting production.

“We appreciate the support of our lenders for this process, many of whom have been invested with the Company for a long time,” Moore stated.

Murray Energy produces 76 million tons of high quality bituminous coal each year, and employs nearly 7,000 people in six states, and Colombia, South America.

The company operates 15 active mines in five regions in the United States.

Murray Energy, like other coal companies, has been affected by declining prices for thermal coal brought on by decreased demand from power plants that are increasingly turning toward other energy sources such as natural gas, Lucas Pipes, a coal analyst with B Riley FBR Inc., told Bloomberg.

“You can’t make payments out of thin air if the money isn’t in the bank,” Pipes told the business publication last month.

Eight major U.S. coal producers have filed for bankruptcy since November 2017, including five this year.

Bob Murray has been an active backer of conservative politics, both in West Virginia and nationally.

Bob Murray personally hosted a fundraiser in July for President Donald Trump in Wheeling, near the company’s St. Clairsville, Ohio, headquarters.

Two of the largest donations so far to Gov. Jim Justice’s re-election campaign — $2,800 for the primary and another $2,800 targeted toward the General Election — have come from the Murray Energy Political Action Committee.

Murray has often used his political platform to push for breaks for the coal industry.

Some federal options to provide financial relief for coal companies — including a proposal frequently backed by Governor Justice to push coal purchases in case of national emergency to assure supply to the energy grid — have not moved forward.

Murray was critical of the Federal Energy Regulatory Commission for its rejection of a rule that would have subsidized coal and nuclear power plants.

In West Virginia, legislators passed a bill last year to lower the severance tax on steam coal from 5 percent to 3 percent over a period of years.

The change will amount to a $60 million reduction of state revenue in the third year.

But Governor Justice, signing the bill earlier this year at a Harrison County mine owned by Murray Energy, said the tax cut would help coal companies and the miners they employ.

Without such a tax decrease, Justice said at the signing ceremony, there would be a risk of some companies closing their doors.

“If they decide they’re not going to do anymore, then you know what happens? 55 companies declare bankruptcy,” the governor said at the time.

“We can’t do without these jobs. There’s no way around it. The multiplier effect of a coal miner’s job is astronomical. At the end of the day, we need to do everything in our power to preserve it, and that’s what I’m trying to do.”

Written by: Brad McElhinny

Letter to Pelosi – Calling for Action

On October 23, 2019, after the House Committee on Natural Resources passed H.R. 935 (The Miners Pension Protection Act), the original co-sponsors of that legislation wrote to Speaker Pelosi urging her to bring the bill to the House floor as quickly as possible to secure the pensions of over 100,000 active and retired miners.

To read the full letter click here.

You can find the full video of the House Committee hearing here.

We have to have action NOW! Reach out to your representative TODAY by calling (202) 224-3121 and tell them to co-sponsor H.R. 935.

For a full list of co-sponsors on this bill click here.

The Coal King is racing to avoid bankruptcy

Source: CNN Business

October 11, 2019

Robert Murray, the king of the coal industry and a forceful supporter of President Donald Trump, is fighting to save his mining empire from financial collapse.

Murray Energy, America’s largest private coal miner, recently failed to make payments to lenders. The company entered into a forbearance agreement that buys it time to negotiate a restructuring. That grace period is scheduled to expire after Monday.

The cash crunch at Murray Energy, one of the most powerful and well-connected companies in the industry, underscores the enormous pressure facing the coal country. Countless coal companies have already filed for bankruptcy.

“It’s a difficult time for anyone in the coal industry,” said Phil Smith, director of communications and governmental affairs at the United Mine Workers of America. “The industry is in trouble. It has been in trouble for almost a decade now.”

Trump’s election in 2016 raised hopes in the coal industry for a revival. The president moved swiftly to slash environmental regulations and even installed a former coal lobbyist to lead the EPA.

However, the deregulatory push is being overwhelmed by market forces. Coal just can’t compete with cheap natural gas and the plunging cost of solar, wind and other forms of renewable energy.

“Coal is not back,” said Smith.

Power companies are ditching coal in favor of cleaner alternatives at a rapid pace. US power plants are expected to consume less coal next year than at any point since President Jimmy Carter was in the White House, according to government forecasts released Tuesday.

S&P downgrades Murray to default status

Unlike many of its peers, Murray Energy was able to overcome the shrinking demand from utilities by focusing on exports. However, those shipments have shrank because of plunging prices overseas.

US coal exports are estimated to have dropped to 20.9 million short tons in the third quarter, according to the US Energy Information Administration. That represents a 28% drop from the same period of 2018. The EIA expected coal exports to keep falling, slipping to 17.3 million by the end of 2020.

“International thermal coal prices have made exports unprofitable for most of 2019, leading to mine idling and deteriorating cash flows,” S&P Global Ratings analyst Vania Dimova wrote in a report this week.

Murray Energy is under so much pressure that it failed to make amortization and interest payments during a grace period that ended on October 7. That led S&P Global Ratings to downgrade the company’s credit rating to “default.”

In a statement last week, Murray Energy said it plans to use the grace period that expires after October 17 to consider its next steps.

The company said it will talk to lenders about “various strategic options” aimed at easing its debt burden, improving its liquidity and achieving a “more sustainable capital structure.”

Murray Energy did not respond to a request for comment. The Ohio-based company says it produces about 76 million tons of coal each year and employs nearly 7,000 people across six US states as well as in Colombia.

‘Crisis situation’ for workers

Mine workers stand to lose in a potential bankruptcy, not just in jobs but potentially in the erosion of healthcare and pension benefits.

Murray Energy is the last major company contributing to the pension plan of the United Mine Workers of America, according to Smith. The pension plan’s depleted funding will only get worse if Murray Energy is relieved of its pension requirements.

“This is a crisis situation for us,” said Smith, noting that the average pension is less than $600 per month.

Murray, the company’s CEO, is a vocal champion of the industry.

In 2017, he praised Trump in an interview with CNN as “very courageous and very prudent” for deciding to withdraw the United States from the Paris climate accord. And Murray simultaneously slammed President Barack Obama as the “greatest destroyer the United States has ever had.”

Murray has also been a deep skeptic of the climate crisis, arguing that the threat of climate change is exaggerated.

The financial trouble facing Murray Energy was telegraphed two years ago. In August 2017, Murray wrote a letter to the Trump administration urgently requesting an emergency order to protect coal-fired power plants from being closed. In the letter, Murray warned the White House that failure to issue the order would spark the immediate bankruptcies of his company and a major customer.

“Our time is running out. Please fight for us,” Murray wrote in the letter.

However, the Trump administration rejected that cry for help because officials determined there wasn’t enough evidence to warrant the use of emergency authority.

In 2017, Murray filed a defamation lawsuit against John Oliver, HBO and CNN owner Time Warner (now called WarnerMedia), alleging “character assassination” during an episode of “Last Week Tonight.” That lawsuit was dismissed last year.

Written by: Matt Egan