Opinion
Case No. 02-14261 JOINTLY ADMINISTERED.
August 6, 2004
FIFTH ORDER EXTENDING THE TIME TO ASSUME, ASSUME AND ASSIGN OR REJECT THE MARROWBONE LEASES
A. WHEREAS, pursuant to Paragraph E of the Order Extending the Time Within Which the Debtors May Assume, Assume and Assign or Reject Their Unexpired Leases of Nonresidential Real Property, dated August 29, 2003 (the "August Order") [DE# 1747], any Marrowbone Leases (as that term is defined in the August Order) for which the Debtors had not consummated an assumption pursuant to 11 U.S.C. § 365(a) prior to December 2, 2003 (the "December Marrowbone Rejection Deadline") were to be deemed rejected pursuant to 11 U.S.C. § 365(d) absent agreement of the lessors to the contrary as set forth therein; and
The Debtors are the following entities: 17 West Mining, Inc., Aceco, Inc., Americoal Development Company, Appalachian Realty Company, Ayrshire Land Company, Bassco Valley, LLC, Beech Coal Company, Bentley Coal Company, Bluegrass Coal Development Company, Bowie Resources Limited, Cannelton Inc., Cannelton Industries, Inc., Cannelton Land Company, Cannelton Sales Company, CC Coal Company, Coal Ventures Holding Company, Inc., Dunn Coal Dock Company, East Kentucky Energy Corporation, Employee Benefits Management, Inc., Employee Claims Administration, LLC, Enerz Corporation, Evergreen Mining Company, Fairview Land Company, Flanary Branch Coal Co., Inc., Franklin Coal Sales Company, G.E.C., Inc., Grassy Cove Coal Mining Company, Hayman Holdings, Inc., Heritage Mining Company, Highland Coal, Inc., HNR Mining, Inc., Horizon Blue Creek Coal Company, Horizon Finance Corp., Horizon Natural Resources Company, Horizon Natural Resources Holding Company, LLC, Horizon Natural Resources Sales Company, Horizon NR, LLC, Ikerd-Bandy Co., Inc., Kanawha Corporation, Kentucky Prince Mining Company, Kermit Coal Company, Kindill Holding, Inc., Kindill Mining, Inc., Leslie Resources Management, Inc., Leslie Resources, Inc., McCoy Coal Company, Meadowlark, Inc., Mega Minerals, Inc., Mid-Vol Leasing, Inc., Midwest Coal Company, Midwest Coal Sales Company, Mining Technologies, Inc., Mountain Coals Corporation, Mountain-Clay Incorporated, Mountaineer Coal Development Company, Old Ben Coal Company, Phoenix Land Company, Premium Processing, Inc., Princess Beverly Coal Company, Princess Beverly Coal Holding Company, Inc., Pro-Land, Inc., Red Ridge Mining, Inc., River Coal Company, Inc., Roaring Creek Coal Company, RP Terminal, LLC, Shipyard River Coal Terminal Company, Skyline Coal Company, Straight Creek Coal Resources Company, Sunny Ridge Enterprises, Inc., Sunny Ridge Mining Company, Inc., Tennessee Mining, Inc., Tucker Mining Company, Turris Coal Company, West Virginia-Indiana Coal Holding Company, Inc., Wyoming Coal Technology, Inc., Zeigler Coal Holding Company and Zeigler Environmental Services Company.
B. WHEREAS, upon various motions, the Court has subsequently entered orders which, inter alia, extended the December Marrowbone Rejection Deadline to no later than 5:00 p.m., on August 1, 2004 (the "August Marrowbone Rejection Deadline"); and
C. WHEREAS, the Debtors and certain of the lessors and sublessors with respect to the Marrowbone Leases have determined that an extension of the August Marrowbone Rejection Deadline is in order to continue efforts to market the Marrowbone mining complex is in the best interest of the various lessors and sublessors and the Debtors' estates; and
D. WHEREAS, in consideration of the terms hereof, the lessors and sublessors who have affixed their signatures on the attached Exhibit A (collectively, the "Lessors"), which is incorporated by reference herein, have agreed to extend the deadline under 11 U.S.C. § 365(d)(4) for assumption or rejection of the Marrowbone Leases, subject to the conditions herein.
IT IS THEREFORE ORDERED THAT :
1. Notwithstanding anything to the contrary in the December Order, the August Order and any subsequent orders by this Court, the deadline by which the Debtors must have consummated an assumption of each of the Marrowbone Leases the lessor or sublessor of which has been served with notice hereof is hereby extended (the "Extension Period") until the earliest to occur of (i) September 3, 2004; (ii) the consummation of an assumption or rejection of each such Marrowbone Lease; (iii) the date upon which the Debtors fail to promptly pay any post-petition obligation that is due or that comes due under any of the Marrowbone Leases or otherwise default post-petition on any of the Marrowbone Leases; or (iv) the date upon which the Debtors fail to comply with the terms and conditions of this Order. Any of the Marrowbone Leases with respect to which the Debtors have not consummated such an assumption, including the payment of any necessary cure amounts due under any of the Marrowbone Leases, prior to 5:00 P.M. prevailing Kentucky time on the final day of the Extension Period (the "Termination Date") shall be deemed to have been rejected as of the Termination Date, unless the parties hereto have agreed otherwise.
2. Without limitation of the foregoing, the Debtors will promptly pay all post-petition obligations of the Debtor Lessee that are due under the Marrowbone Leases, including royalties, minimum royalties, real estate taxes, personal property taxes and other costs associated with the Marrowbone Leases during the Extension Period.
3. The Debtors will continue to maintain the structural and physical status quo at the Marrowbone mining complex and continue to comply with the terms of paragraph E of the August Order, except as provided above with respect to assumption or rejection during the Extension Period. Without limitation of the foregoing, the Debtors will maintain all of the infrastructure at the Marrowbone mining complex in its current condition and location.
4. The Debtors will provide Lessors' consultants and their designees full access to the Marrowbone mining complex, to information (including information concerning reclamation) concerning the Marrowbone mining complex, and to the Debtors' personnel (all at such times that are mutually acceptable to the Debtors and the Lessors), in order to assist in Lessors' further evaluation of the Marrowbone mining complex.
5. Notwithstanding the Debtors' right under the Bankruptcy Code to assign a lease without the consent of the Lessor, each of the Lessors shall have the right to review any prospective assignees of such Lessor's Marrowbone Lease and to approve or disapprove of any proposed assignment thereof, in such Lessor's sole discretion; provided, however, that the Debtors may assign the Marrowbone Leases to one or more assignees if a two-thirds (2/3) super-majority of the Lessors whose leaseholds are proposed to be assumed and assigned to a particular assignee consent to such assignment (which supermajority (the "Majority") shall be determined based upon the total number of acres leased by the Debtors under the Marrowbone Leases which the Debtors propose to assume and assign in the assignment under consideration), and provided further that no Lessor shall disapprove of a proposed assignment based upon an assignee's refusal to pay a lump sum payment upon such assignment other than, or in additional to, the cure of arrearages due under such Lessor's Marrowbone Lease or to pay a royalty rate above six percent (6%) of the sales price (as calculated under the relevant lease) for coal removed from such leasehold, unless the existing Lessor's Marrowbone Lease provides for a greater royalty in which case the greater amount shall control.
6. The Debtors will continue to actively pursue assignees for the Marrowbone Leases and will actively include the Lessors in ongoing negotiations with prospective assignee, the intent of the parties being to provide for complete participation by Lessors in such discussions.
7. The Debtors will continue reclamation at the Marrowbone mining complex on areas that have been disturbed by mining operations consistent with the Debtors' obligations under mining permits, the Marrowbone Leases, and applicable state and federal laws, rules and regulations.
8. The Debtors will meet with and actively seek input from the consultants of the Lessors regarding reclamation plans for the Marrowbone mining complex. The Debtors will work with Ben Daud and the West Virginia Department of Environmental Protection (the "DEP") to schedule and prioritize reclamation projects on permitted areas at the Marrowbone mining complex. Promptly before and after any meeting (telephonic or otherwise), negotiation, or submission of any proposal to the DEP with respect to reclamation that impacts the Marrowbone Leases, the Debtors will confer with the Lessors' consultants concerning the content and scope of any such communication.
9. The Debtors will continue negotiations with their bonding companies at the Marrowbone mining complex in an attempt to reach an agreement with the bonding companies to fund reclamation at the Marrowbone mining complex. The Debtors will include the Lessors' consultants in such negotiations unless the bonding companies certify in writing that they have, of their own accord, refused to allow such inclusion.
10. Nothing in this Order shall modify the respective rights, duties and obligations of the Debtors and Deutsche Bank Trust Company Americas ("Deutsche Bank") under (a) the Debtor-In-Possession Credit Agreement and Adequate Protection Stipulation (the "DIP Credit Agreement") dated as of November 15, 2002, by and among the Debtors, the financial institutions thereto, and Deutsche Bank as administrative agent or (b) the Order Resolving Motions to Reconsider Final Order (I) Authorizing Post Petition Financing, (II) Authorizing the Use of Cash Collateral and (III) Granting Super Priority Expense Claim Status, entered on March 26, 2003 (the "DIP Order") [DE #837], provided, however, that compliance with the terms of the DIP Credit Agreement or the DIP Order shall not excuse a default under the terms of this Order.
11. The rights, terms, conditions and obligations of the parties hereto first conferred by the Order shall terminate upon the Termination Date, provided, however, that any rights, terms, conditions and obligations otherwise conferred, if any, which would continue to exist after a rejection (absent this Order), including without limitation pursuant to the previous Orders of this Court, will continue to exist. The Lessors and the Debtors explicitly acknowledge that they disagree as to whether any rights, terms, conditions and obligations of the August Order survive assumption, assumption and assignment, or rejection of the Marrowbone Leases.
The Debtors and the parties on Exhibit A have consented to the terms of this Order, including without limitation to the extension of the August Marrowbone Rejection Deadline, which consent is expressly conditioned upon the entry of this Order in the form submitted.
Pursuant to Local Rule 9022-1(c), counsel for the Debtors shall cause a copy of this order to be served on each of the parties designated to receive this order pursuant to Local Rule 9022-1(a) and shall file with the Court a certificate of service of the order upon such parties within ten (10) days hereof.
Parties to be served with a copy of this Order: All parties served with the Motion of Debtors for Fourth Order Extending the Time to Assume, Assume and Assign or Reject Certain Unexpired Leases of Nonresidential Real Property Regarding the Marrowbone Mining Complex.
EXHIBIT A