A federal judge has approved a $5 million lifeline to help Milton-based Revelation Energy, the nation’s sixth-largest coal producer, navigate bankruptcy on the condition that its CEO, Jeff Hoops, step down.
Court documents filed Wednesday said the financing from Riverstone Credit Partners will go toward providing security and personnel to extinguish fires at Blackjewel LLC’s mines as it determines its next steps.
The agreement requires Hoops to resign.
The company filed for Chapter 11 bankruptcy protection Monday, with Hoops saying there wasn’t enough money to operate or pay employees’ salaries.
According to documents filed in the U.S. Bankruptcy Court for the Southern District of West Virginia, the company and its affiliate Blackjewel LLC is “entering Chapter 11 with insufficient cash to operate their businesses” and “needs additional liquidity, in addition to the cash flow from operations, to fund and operate their business.”
The companies, which are owned by Hoops, operate surface mining operations, deep mine operations and loadout facilities in Eastern Kentucky, Southern West Virginia, Western Virginia and Northeastern Wyoming. Blackjewel has about 1,100 employees in its Eastern Division at mines in Kentucky, Virginia and West Virginia. It also operates two mines with about 600 workers in Northeast Wyoming.
“Today’s announcement represents another significant step in our continued efforts to position the company for long-term success,” Hoops said in a statement Monday. “After carefully evaluating our options, we determined that the best way to solidify our financial position and strengthen our balance sheet was to proceed with a comprehensive financial restructuring under court protection. We are confident that this restructuring will solidify Blackjewel’s position as a significant participant in the U.S. coal market.”
According to the documents, the companies have 1,000 to 1,500 creditors and assets valued between $500 million and $1 billion. The companies owe up to $500 million for royalties in goods and taxes, according to the documents.
They owe approximately $233 million to 30 top creditors, including more than $60 million in royalties to the U.S. Department of the Interior, nearly $37 million in taxes to the Campbell County, Wyoming, Treasury and nearly $11 million in taxes to the Wyoming Department of Revenue.
The companies’ total cash balance is $138,000 and they need to make an approximately $5 million payment in unpaid wages to its employees by the end of the July 12 payroll period.
Two Blackjewel-operated mines in Wyoming sent more than 700 employees home Monday, the Gillette News Record reported. This comes after the company missed a scheduled $1 million payment to Campbell County, Wyoming.
Other major U.S. coal producers also have filed for bankruptcy protection in recent years.
Hoops owns the Hoops Family Foundation, which has donated money to Marshall University and Cabell Huntington Hospital. The foundation donated $3 million in 2012 to help create the hospital’s children’s wing, which bears its name.
Hoops and his wife, Patricia, also are converting the old Morris Memorial Hospital, in Milton, into a 189-acre resort and hotel called The Grand Patrician.