Walter Energy, Inc.

Chapter 7 · Sale Process

Case No. 15-02741Alabama NorthernPetition date Jul 15, 2015

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Walter Energy, Inc. Bankruptcy Case

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AI-generated summary. Check the cited filings before relying on it.Updated May 29, 2:21 AM ET

Latest developments

StatusJuly 20, 2017

Chapter 7 trustee keeps BP oil-spill claims alive with contingency counsel

Andre M. Toffel, the Chapter 7 trustee, received authority to retain Cunningham Bounds, LLC and Maynard, Cooper & Gale, P.C. as special counsel to continue pursuing Walter Energy estate claims arising from the Deepwater Horizon oil spill. The court approved the retention nunc pro tunc to the Chapter 7 conversion date, with the firms sharing a 15% contingency fee on any recovery from the BP claims and no ordinary hourly-fee application process unless the court later requests time or project detail Special Counsel Retention Order.

The order matters because the Chapter 7 case was no longer just winding down administratively: the trustee was preserving litigation recoveries for claimholder estates after the cases converted from Chapter 11 effective February 21, 2017 Conversion Order. For professionals tracking recoveries, the 15% contingency structure also frames how any BP-claim proceeds would be shared before flowing into the Chapter 7 estate.

Key professionals

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Financial Advisor

Berkeley Research Group

Financial Advisor

FTI Consulting

Investment Banker

Blackstone Advisory Partners L.P.

Investment Banker

Houlihan Lokey Capital, Inc.

Walter Energy’s case posture in the available docket set is a mature Chapter 11 that began as a balance-sheet and operating-cost restructuring for an overlevered metallurgical coal producer, with the later record here showing appeal activity rather than a fresh operating or plan milestone. The debtors entered Chapter 11 on July 15, 2015, after a collapse in met-coal pricing left the business carrying unsustainable leverage, large labor and retiree obligations, and high annual interest expense despite cost reductions and liquidity preservation efforts described in the Harvey First Day DeclarationDkt. 3.

The filing followed a capital structure built around approximately $3.153 billion of funded debt, including a $978.2 million first-lien term loan, $970 million of 9.500% first-lien notes, a $73 million first-lien revolver letter-of-credit facility, $360.5 million of second-lien PIK toggle notes, and roughly $771.3 million of unsecured senior notes, all summarized in the Harvey First Day DeclarationDkt. 3. Operationally, Walter Energy was a Birmingham-based producer and exporter of metallurgical coal with U.S., Canadian, and U.K. assets, including Alabama underground mines, a coke plant, natural gas operations, and a workforce with significant union representation and retiree-benefit exposure.

The restructuring path identified at filing centered on a Restructuring Support Agreement with creditors, a debt-to-equity conversion of more than $1.8 billion, and a potential section 363 sale process, with the company’s ability to execute dependent in part on obtaining labor and retiree-benefit concessions under Bankruptcy Code sections 1113 and 1114 as described in the Harvey First Day DeclarationDkt. 3. The context pack does not include a confirmed plan, sale order, effective-date notice, or current hearing calendar; the latest cited docket materials are appeal submission sheets filed in October 2015 and January 2016, including the Notice of Appeal Submission SheetDkt. 1 and later Notices of Appeal Submission SheetDkt. 1.