Creditors file bankruptcy petition against Trinity Coal

THREE creditors of US producer Trinity Coal have reportedly filed an involuntary Chapter 11 bankruptcy petition in a Kentucky court, seeking millions from the troubled miner.
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Donna Schmidt

While owner Essar Group has not released a public statement on the move, Bloomberg reported Wednesday that units of Credit Agricole SA, ING Groep NV and Natixis were seeking about $104.3 million in claims per the documentation submitted to the US Bankruptcy Court for the Eastern District of Kentucky in Lexington.

The group has also filed an involuntary petition against Trinity’s Frasure Creek Mining.

“Trinity’s current management has failed to negotiate with Trinity’s creditors,” Credit Agricole reportedly said in court papers, which call for the selection of a Chapter 11 trustee.

The case is formally known as In re Trinity Coal Corp, 13-50364.

India-based Essar confirmed its $US600 million purchase of Trinity in March 2010.

At the time, West Virginia-headquartered Trinity was one of the top 10 US coal producers with 7 million tons per annum of coal production with plans to ramp up to 10Mtpa.

“Trinity Coal will be an excellent addition to our North American business, ensuring that we become an integrated player in the region,” Essay chief executive and billionaire Prashant Ruia said at the time.

“Access to Trinity’s vast coal reserves and the opportunity to work with a team of skilled personnel will take us closer to our vision of becoming one of the lowest cost steel producers in the world.”

Last August, Trinity chief David Stetson told West Virginia newspaper the Register-Herald that it had suspended some of the Appalachian operations of Frasure Creek and would sell about 180 pieces of mining and earth-moving equipment at auction.

A customer request for a one-month deferment led to the decision to temporarily stop production, Stetson told the paper, and that its move was not an indication of changes to its future operational scale.

Rumors of a restructure of sale were growing louder at that point in time, particularly when auctioneer Richie Brothers announced an event in North Carolina that would include Trinity’s fleet.

Stetson did not comment those rumors at the time but did say, however, that bankruptcy was not a part of the company's plan.

According to state records, Trinity filed for Chapter 7 voluntary bankruptcy in October 2005. It was discharged in 2006.

Trinity’s Frasure Creek Coal has both surface and underground operations in Kentucky and West Virginia, including permits for four surface mines, three underground mines, haul roads, a conveyer and prospects.

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