Blackhawk Mining’s Restructuring

Davis Polk advised an ad hoc group of first- and second-lien lenders to Blackhawk Mining, LLC, consisting of Solus Alternative Asset Management, Knighthead Capital Management and Redwood Capital Management, in connection with the restructuring of Blackhawk and certain of its affiliates.

Blackhawk entered into a restructuring support agreement with over 90% of its lenders (including the ad hoc group) and more than 80% of its equity holders and commenced solicitation on a plan of reorganization.

Blackhawk and substantially all of its wholly owned subsidiaries filed its voluntary chapter 11 petitions in the United States Bankruptcy Court of Delaware. Blackhawk, its lenders, and its equity holders have agreed to the principal terms of a plan of reorganization, which will be subject to approval by the Bankruptcy Court. Under the plan, the holders of Blackhawk’s first-lien term loans will exchange their debt for new debt and equity of the reorganized company, while holders of Blackhawk’s second-lien term loans will exchange their debt for equity of the reorganized company. On July 23, 2019, the Bankruptcy Court entered an order approving Blackhawk’s debtor-in-possession financing facilities on an interim basis. The debtor-in-possession financing facilities include $50 million of new money financing from the prepetition first-lien lenders party to the restructuring support agreement that will be converted into an exit facility.

Blackhawk is a privately owned coal mining and marketing company headquartered in Lexington, Kentucky. The company operates 10 mining complexes across West Virginia and Kentucky with approximately 2,800 employees. Blackhawk primarily sells metallurgical coal to a diverse array of domestic and international steel producers and industrial customers.

The Davis Polk restructuring team includes partner Brian M. Resnick (Picture) and associates Dylan A. Consla and Erik Jerrard. The finance team includes partner Jinsoo H. Kim and counsel David Hahn. The corporate team includes partner Stephen Salmon and associate Shanu Bajaj. Partner Lucy W. Farr and associate Elina Khodorkovsky are providing tax advice. Partner Edmond T. FitzGerald is providing executive compensation advice.

Involved fees earner: Shanu Bajaj – Davis Polk & Wardwell; Dylan Consla – Davis Polk & Wardwell; Lucy Farr – Davis Polk & Wardwell; Edmond FitzGerald – Davis Polk & Wardwell; David Hahn – Davis Polk & Wardwell; Erik Jerrard – Davis Polk & Wardwell; Elina Khodorkovsky – Davis Polk & Wardwell; Jinsoo Kim – Davis Polk & Wardwell; Brian Resnick – Davis Polk & Wardwell; Stephen Salmon – Davis Polk & Wardwell;

Law Firms: Davis Polk & Wardwell;

Clients: ad hoc group of first- and second-lien lenders to Blackhawk Mining;

Author: Ambrogio Visconti