Trinity and several affiliates were forced into involuntary bankruptcy last February by major creditors, including units of Credit Agricole SA, ING Groep NV and Natixis, who claimed they were owed more than $104 million. Essar acquired Trinity, a central Appalachian coal producer, for $600 million in 2010. Trinity’s holdings are located in Breathitt, Floyd, Knott, Magoffin and Perry counties in eastern Kentucky and Boone, Fayette, Mingo, McDowell and Wyoming counties in West Virginia.
For several months, Trinity was moving toward a sale of some or all of its mining assets: Deep Water Resources, North Springs Resources and Falcon Resources in West Virginia and Prater Branch Resources, Little Elk Mining and Lavisa Fork in eastern Kentucky.
But this summer, Trinity asked the U.S. Bankruptcy Court for the Eastern District of Kentucky to delay a planned court-sanctioned auction of the Trinity assets. Then, Essar unveiled a plan to retain the assets and seek to reorganize Trinity’s debts.
Although a Trinity attorney declined to comment on the reason for Essar’s change of heart, other lawyers involved in the bankruptcy case suggested Essar concluded the assets probably would not fetch a desired high price given the soft coal market, particularly for Central Appalachia coal.
Essar, the attorneys said, wants to buy back Trinity’s debt from the creditors.
Of the six mining complexes, only the Deep Water and related metallurgical operations in Fayette County, W. Va., is currently producing coal. The others have been idled for some time.
