Big Coal Bankruptcies Leave Red, Not Black, for Big Law
Three companies that recently began Chapter 11 proceedings owe millions in legal fees to a half-dozen law firms.
October 17, 2018 at 03:25 PM
4 minute read
The U.S. coal industry may be keen on some of the Trump administration's plans for environmental regulation, but with coal consumption continuing its rapid decline, three recent coal company bankruptcies have created a handful of Big Law creditors.
A half-dozen law firms are owed nearly $2.1 million in legal fees from Westmoreland Coal Co., Mission Coal Co. LLC and Tonawanda Coke Corp., according to court filings in Chapter 11 cases filed by all three debtors this month.
Englewood, Colorado-based Westmoreland, one of the oldest coal companies in the country, became the fourth major U.S. coal company to file for bankruptcy in recent years when it began Chapter 11 proceedings in Houston on Oct. 9. According to a list of Westmoreland's 50 largest unsecured creditors, the debtor owes $79,831 to Holland & Hart; $76,812 to Charleston, West Virginia-based Bowles Rice; and $63,751 to Denver-based Davis Graham & Stubbs.
Westmoreland paid $70,000 through the second quarter of this year to Holland & Hart to monitor carbon capture legislation and other federal environmental issues affecting the coal industry, according to lobbying records on file with the U.S. Senate.
Kirkland & Ellis partners James Sprayregen, Michael Slade and Gregory Pesce in Chicago, Stephen Hessler and Edward Sassower in New York and Anna Rotman in Houston have teamed up with Jackson Walker partners Patricia Tomasco and Matthew Cavenaugh in Houston to advise Westmoreland in its Chapter 11 case, although neither firm has yet filed billing statements with the bankruptcy court. Jones Day is acting as outside counsel to the conflicts committee of Westmoreland's board of directors, according to a statement by the company, whose chief administrative and legal officer is Jennifer Swanson Grafton.
On Oct. 14, after less than a year in business, Kingsport, Tennessee-based Mission Coal began its own restructuring proceedings in a bankruptcy court in Birmingham, Alabama. A list of Mission Coal's 50 largest unsecured creditors shows that the company owes $1.01 million to White & Case; $562,915.98 to Steptoe & Johnson PLLC (a West Virginia-based firm separate from the Am Law 100 shop of the same name); and $261,207.55 to Bradley Arant Boult Cummings.
Mission Coal also lists 10 litigation claims involving disputes with litigants represented by Ogletree, Deakins, Nash, Smoak & Stewart; Birmingham's Richard Wyatt; Delaware's Young Conaway Stargatt & Taylor; national personal injury firm Heninger Garrison Davis; and three West Virginia-based firms: Hamilton, Burgess, Young & Pollard; Hendrickson & Long; and The Masters Law Firm.
The company, which owns Pinnacle Mining's operations in West Virginia, is being represented in bankruptcy court by Kirkland's Hessler and fellow restructuring partner Brad Weiland in Chicago. Birmingham-based Christian & Small is also counseling Mission Coal, whose general counsel is former Jones Day lawyer Gary Broadbent. Neither firm has yet filed billing statements with the bankruptcy court.
Tonawanda Coke, based in the municipality of the same name just north of Buffalo, New York, filed for bankruptcy on Oct. 15 in the city. The company, advised by Garry Graber, leader of the bankruptcy, restructuring and commercial litigation practice at leading local firm Hodgson Russ, cited debts and obligations incurred as a result of public health and safety issues it faces near Buffalo as the reason for its insolvency. Hodgson Russ has not yet filed billing statements with the bankruptcy court.
Bluefield, West Virginia-based Schagrin Associates, an international trade and lobbying outfit controlled by former Thompson Hine lawyer Roger Schagrin, is listed as being owed $37,500 from Tonawanda Coke, according to a list of the company's 20 largest unsecured creditors. In September, federal prosecutors in Buffalo asked a U.S. district court judge to shut down a Tonawanda Coke facility over alleged environmental violations.
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