GILLETTE — Blackjewel LLC’s new management team, assembled in the wake of former-CEO Jeffrey Hoops’s departure, is trying to secure new financing and a bankruptcy judge’s approval by Friday to reopen the company’s mines, according to statements made by lawyers in bankruptcy court over the weekend.
“Our hope and our expectation is that we will have our financing lined up in the next few days with the plan, assuming it all comes together, to present that to [Judge Frank W. Volk] on an emergency interim basis on Friday,” said Travis McRoberts of Squire Patton Boggs, a law firm representing Blackjewel in its bankruptcy.
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“Our hope and everything we are working towards as diligently and quickly as we possibly can is to line up that additional financing that we need to bring back all of the employees and run the mines at full capacity,” McRoberts said at the Saturday hearing in a federal bankruptcy court in West Virginia.
On July 1, Blackjewel suddenly closed the Eagle Butte and Belle Ayr coal mines in Campbell County after United Bank balked at a $20 million loan to keep the mines operational through a bankruptcy proceeding. The mines’ 580 employees appeared to be jobless.
After a hectic three days in which it appeared the mines were headed for liquidation and permanent closure, energy investment group Riverstone Financial put up $5 million in emergency funding to place a skeleton safety and security crew at Blackjewel’s mines. Hoops’ resignation was a condition of that loan.
Now, with Hoops gone, Blackjewel is under the management of David Beckman, a member of a financial consulting firm that Blackjewel (under Hoops) hired to guide the company through bankruptcy. The new management team is negotiating for fresh financing to reopen and run the mines while bankruptcy proceedings continue, according to the remarks made by lawyers for Blackjewel.
Blackjewel entered bankruptcy with staggering debt and almost no cash at hand. The company owes around $250 million to governments, employees and vendors, according to court filings. It had only a little more than $100,000 in cash at the time of its bankruptcy filing.
The company owns mines in several eastern states along with its Wyoming properties.
The Campbell County Sheriff’s Department had been guarding the properties while the Wyoming Department of Environmental Quality inspected the mines for environmental and safety hazards since Blackjewel abandoned them July 1. Those hazards included the potential spontaneous combustion of coal piles.
Blackjewel also claimed in a statement to its employees posted online on Friday that it was working to reopen the mines.
“We assure you the company is working as quickly as possible to try to obtain the financing necessary to re-open the mines and to bring our employees back to work,” the statement said. “As you may know, the majority of operations have now been re-staffed and are being prepared for a safe and efficient restart.”
In Gillette, Blackjewel employees outside a meeting put on by Gillette Workforce Services on Monday speculated that they could be back at work by the end of the week. An independent contractor who did work at the two mines told WyoFile that Blackjewel’s management team had contacted him to negotiate his return to work.
Volk, who has expressed significant concern for Blackjewel employees and called the chaotic bankruptcy filing “unprecedented,” told lawyers that if the parties are ready before Friday he would schedule a hearing earlier.
He echoed the uncertainty for many Campbell County miners at the conclusion of Saturday’s hearing when he said “this just seems to be a day-by-day thing.”