Walter Energy (WEI) filed with the U.S. Bankruptcy Court a motion authorizing the Debtors to surrender and liquidate its Provident Life and Accident Insurance Company Plan Number 61002.
The motion explains, “Pursuant to the terms of the Plan and the Policies, WEI, as owner of the Policies, may terminate the Plan and surrender the Policies in exchange for the cash surrender value of the Policies. Under the terms of the Policies, if the Policies are surrendered, the cash surrender value is payable to WEI as owner of the Policies. As of March 1, 2016, there were nineteen outstanding Policies issued pursuant to the Plan, with a total cash surrender value of $12,819,729.77 (the ‘Cash Surrender Value’)….As the Debtors are winding down operations in light of the Sale…the Debtors have determined that terminating the Plan and surrendering the Policies is appropriate under the circumstances and in the best interests of the estates. Without limitation, the court-authorized sale of the Debtors’ core Alabama coal mining operations (the ‘Sale’) is scheduled to close at the end of March, after which point the Debtors will have few, if any, employees. Moreover, surrendering WEI’s interest in the Policies will bring over $12 million in cash to the Debtors’ estates to satisfy certain obligations, including the DIP Obligations.”
The motion continues, “If such funds are received by the Debtors before the Closing Date, as that terms is defined in the Asset Purchase Agreement dated November 5, 2015 by and among Coal Acquisition, LLC (n/k/a Warrior Met Coal, LLC) as Buyer (‘Buyer’) and Walter Energy, Inc. and Certain Subsidiaries of Walter Energy, Inc. as Sellers (the ‘APA’) the funds will be used to prepay the outstanding DIP Obligations in accordance with the terms of the DIP Credit Agreement, and will minimize the Debtors’ need to draw on the DIP Facility (as defined in the DIP Financing Order).”
The Court scheduled a March 30, 2016 hearing to consider the motion. Read more WLT bankruptcy news.
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