Boston, MA, 04/09/2014 (usastockreport) – James River Coal Company (NASDAQ:JRCC), a U.S. based leading mine operator, made the announcement on April 7, 2014, that the firm and its associated subsidiaries voluntarily filed a petition for the Bankruptcy Code of Chapter 11 in the Court of Bankruptcy in the Eastern District, Richmond Virginia Division. By filing for Chapter 11 petition, JRCC intends to use Ch. 11’s processes for implementing a complete turnaround strategy for addressing the challenges being faced by the firm in the industry of coal mining.
JRCC’s customer shipments as well as a mining operation will function ordinarily throughout the process of restructure.
James River Coal Company (NASDAQ:JRCC) decided to file for Ch. 11, Bankruptcy Code because it will allow the firm to restructure and adjust its balance sheet. It will also allow the firm to improve its operation in a more definite and controlled manner. The firm will also be able to evaluate and explore different strategies for its operation, like selling some portions of JRCC or capital investment through reorganization.
Along with this restructuring process, JRCC is also planning to enter in a DIP (debtor in possession) facility with a number of huge financial funds which would be worth $110 million. The proceeds that JRCC will obtain from its ongoing operations, the firm will be using it in the restructuring period for its business.
JRCC has also filed some motions to the Court of Bankruptcy, for the normal operation of the firm during this restructuring.
The Chief Exec Officer and the Chairman of JRCC, Peter T Socha, said that the coal industry of the U.S. has faced a lot of dramatic changes in the past many years, some permanent and some cyclic changes. The operation of James River Coal Company (NASDAQ:JRCC) needs to align with these changes for its better and continuous operation. He further added that this is the reason the firm has filed for the petition and needs to align its debt structure and balance sheet with the changed industry.