In early March, the U.S. Bankruptcy Court for the Eastern District of Kentucky in Lexington had not yet issued a ruling on requests by one group of creditors—Credit Agricole SA, ING Groep NV and Natixis—to appoint a Chapter 11 trustee to essentially take over Trinity’s business operations. They contend Trinity has defaulted on bills totaling about $104.3 million.
Those creditors also joined a separate involuntary Chapter 11 suit filed in the Lexington court by three Frasure Creek creditors: Austin Powder Co., Cecil I. Walker Machinery and Whayne Supply Co. They allege Frasure Creek owes them more than $20 million for goods, services and parts they provided.
Trinity, acquired by Essar for $600 million in 2010, is a Central Appalachian coal producer with holdings in Breathitt, Floyd, Knott, Magoffin and Perry counties in eastern Kentucky and Boone, Fayette, Mingo, McDowell and Wyoming counties in West Virginia. The company’s operations produce both steam and metallurgical coal.
In a court filing, Ronald Spitzer, managing director in the asset recovery group at Credit Agricole, said he had “lost all confidence in Trinity’s current management team and in Essar’s ability to effectively oversee Trinity’s operations.” Trinity has been in default under Credit Agricole’s credit agreement since August 2011, he said, and stopped making scheduled quarterly principal and accrued interest payments in June 2012. Since then, he said, Credit Agricole has issued Trinity eight reservation of rights and notice of default letters.