Cash-strapped Murray Energy faces liquidation

Bloomberg

Bankrupt coal miner Murray Energy Corp could be forced to liquidate unless a federal judge lets it cut healthcare payments to retirees, according to court papers.
Murray Energy, the largest private coal miner in the US, is asking the judge overseeing its Chapter 11 bankruptcy to let it shed certain health-care obligations in a bid to stave off a default under its bankruptcy loan and conserve cash, the court papers show.
Stopping the healthcare payments would save the company $200,000 a day — some $6 million a month — and wouldn’t hurt the retirees because the benefits are backstopped by the US government, according to the request.
“The bottom line is that if the debtors do not cut off these obligations in the near term, they will likely exhaust liquidity during these cases,” attorneys for the company wrote in the papers, adding that Murray Energy “may be faced with no choice but to begin a value-destructive enterprise-wide liquidation.”
Murray Energy has taken other steps to curb costs, including abandoning some employee bonuses, laying off or dismissing at least 540 employees and idling mines. In addition, CEO Robert D Moore is now personally approving any expenditure greater than $25,000.
The troubles come as Murray Energy presses on with a plan to hand control to its major lenders.