October 25, 2018 – Westmoreland Coal filed a Plan of Reorganization [Docket No. 294] and related Disclosure Statement [Docket No. 293]. The Disclosure Statement notes, “The Plan proposes to fund creditor recoveries from Cash on hand, the Purchaser Stock, debt issued by the Purchaser or any of its subsidiaries, the Sale Transaction Proceeds (if any), the Non-Core Asset Sale Proceeds (if any), the General Unsecured Claims Amount, the WLB Debtors’ rights under the Sale Transaction Documentation, payments made directly by the Purchaser on account of any Assumed Liabilities under the Sale Transaction Documentation…. Although the WLB Debtors will continue to market their assets on a postpetition basis and will hold the Auction to the extent Qualified Bids for the WLB Debtors’ assets are submitted in accordance with the Bidding Procedures, the Stalking Horse Purchase Agreement represents a floor bid for the sale of the WLB Debtors’ assets. The WLB Debtors intend to consummate the Sale Transaction with the bidder that provides the highest or otherwise best offer as contemplated under the Bidding Procedures Order, the Sale Transaction Documentation and the Plan.
Pursuant to the Plan, the WLB Debtors or the Plan Administrator shall pay or provide for payments of Claims as follows:
- Priority Claims will be paid in full on the Plan Effective Date (or, in the case of Priority Tax Claims, treated in accordance with section 1129(a)(9)(C) of the Bankruptcy Code),
- Other Secured Claims will be treated in such a manner that they are Unimpaired,
- DIP Facility Claims will either be: o (i) if the Stalking Horse Purchaser is the Successful Bidder, assumed by the Stalking Horse Purchaser on the Plan Effective Date; or o (ii) if the Stalking Horse Purchaser is not the Successful Bidder, paid in full in Cash on the Plan Effective Date,
- Holders of First Lien Secured Claims will receive either: (i) in the event the Stalking Horse Purchaser is the Successful Bidder, their pro rata share of (x) the Purchaser Stock and (if applicable) all debt issued or assumed (excluding any amounts assumed related to the DIP Facility) by the Purchaser or any of its direct or indirect subsidiaries, as set forth in the Description of Transaction Steps; (y) the Non-Core Asset Sale Proceeds; and (z) all proceeds of the WLB Debtors’ assets that constitute Collateral of the Holders of First Lien Secured Claims, including but not limited to the WLB Debtors’ Interests in the WMLP Debtors, which are not Transferred Assets; or (ii) in the event the Stalking Horse Purchaser is not the Successful Bidder or the Sale Transaction is not consummated, payment in full in Cash on the Plan Effective Date,
- Holders of General Unsecured Claims, including First Lien Deficiency Claims, against each of the WLB Debtors will receive their pro rata share of the General Unsecured Claims Amount, and
- Existing Interests in the WLB Debtors will be cancelled without any distribution to the Holders of such Interests.”
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