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Walter Energy Conversion Sought

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Walter Energy filed with the U.S. Bankruptcy Court a motion for an order (a) converting the Debtors’ Chapter 11 cases to liquidation under Chapter 7 and (b) granting related relief.

The motion explains, “Having consummated the sale transactions, the Debtors have transferred, or have obligated themselves to transfer, every asset that they own. Since the sale closing, the Debtors have been winding down their Chapter 11 estates. In accordance with the wind down trust agreement established under the asset purchase agreement with Warrior Met Coal, the Debtors have facilitated the orderly wind down of the Debtors’ remaining operations and affairs, including the liquidation and collection of substantially all of the Debtors’ remaining property. The Debtors have also satisfied their continuing obligations under the respective asset purchase agreements and the transition services agreement the Debtors entered into with Warrior Met Coal on March 31, 2016 (the ‘Transition Services Agreement’).”

In addition, “The Chapter 11 wind down process is now substantially complete. The Debtors are current on their post-petition costs of running the Chapter 11Cases and the post-sale wind-down….Other than as provided under the global settlement, no prospect of payment of unsecured claims exists. Finally, the Wind Down Trust…expires on its own terms on February 28, 2017. Lacking a compelling need to further administer these cases in Chapter 11, and with approximately $1.6 million remaining in the Wind Down Trust for funding a chapter 7 trustee to administer the Remaining Assets, conversion of these cases is now appropriate and justified. The Debtors accordingly request conversion of the Chapter 11 Cases to ones under Chapter 7 in accordance with the conversion procedures set forth herein.”

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