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Armstrong Energy Bankruptcy Plan Filed

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Armstrong Energy filed with the U.S. Bankruptcy Court a First Amended Joint Chapter 11 Plan of Reorganization and related Disclosure Statement.

According to the Disclosure Statement, “Armstrong will create (i) a new holding company (‘HoldCo’), a Delaware limited liability company, which shall be wholly owned by Armstrong, and (ii) one, or, if designated by Knight Hawk and the Required Supporting Senior Noteholders, more than one new Delaware limited liability companies (‘NewCo’), which shall be wholly owned by HoldCo to which the Debtors will transfer substantially all of their assets (the ‘Transferred Assets’) and certain of their liabilities; (b) Senior Noteholders, in satisfaction of $90 million of the Allowed Senior Notes Secured Claims, will acquire (i) 100 percent of the common equity in HoldCo (subject to dilution on account of common equity in HoldCo, if any, issued to Knight Hawk in connection with the Sale Transaction) and (ii) $10 million in preferred equity of HoldCo (subject to dilution on account of the preferred equity in HoldCo issued to Knight Hawk in connection with the Sale Transaction); and (c) Knight Hawk, who will oversee the management of the day-to-day business of NewCo post-closing, will then receive a portion of the economic interests in HoldCo in exchange for (i) indirectly providing NewCo with the funding necessary to pay certain Cure Costs (including prepetition Cure Costs of Assumed Contracts, but excluding Debtor Cure Costs) associated with the assumption and assignment to NewCo of certain of the Debtors’ contracts and leases and other Effective Date obligations as set forth in the Transaction Agreement, (ii) paying to HoldCo the Cash value of certain prepaid expenses included in the Transferred Assets (not to exceed $600,000), provided that such amount shall immediately thereafter be contributed to NewCo and immediately thereafter, be paid to Armstrong, and (iii) paying the amount of the Inventory Purchase Price (collectively, (i) through (iii), the ‘Contribution’).”

Read more Armstrong Energy bankruptcy news.

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