May 8 (Bloomberg) -- James River Coal Co., the mining company that filed for bankruptcy last month, won court approval of $110 million in financing to fund business operations over the objection of its unsecured creditors.
U.S. Bankruptcy Judge Kevin Huennekens gave final approval of the financing yesterday at a hearing in Richmond, Virginia, according to court filings.
The company received interim approval to borrow as much as $80 million on April 9 from a syndicate of lenders including Cantor Fitzgerald Securities as administrative agent and Deutsche Bank AG as arranger.
The unsecured creditors’ committee filed papers May 2 asking the judge to withhold final approval unless the credit agreement was modified. The creditors called the fees associated with the proposed financing “extraordinarily expensive.”
James River also got approval of “strategic transaction bidding procedures.” The procedures allow for several restructuring strategies, including choosing one or more opening bidders at a court-supervised asset auction and pursuing an alternative restructuring strategy, according to court papers.
Through this process “the value of the debtors and the auctioned assets will be market-tested, and the potential recovery to the debtors’ estates offered by bids contemplating a sale can be compared against the recovery offered by bids to sponsor a standalone restructuring,” James River said in court papers.
Richmond-based James River filed for bankruptcy April 7, listing $818.7 million in debt, after declining coal prices caused it to idle a dozen mines.
The case is In re James River Coal Co., 14-bk-31848, U.S. Bankruptcy Court, Eastern District of Virginia (Richmond).
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