About 1,700 locked out Blackjewel LLC employees continue to wait for the results of an auction for the bankrupt coal company, many on edge about whether they’ll be called back to work or be out of jobs permanently.
The workers have been off the job since July 1, when the company filed for Chapter 11 bankruptcy reorganization and shut down its 32 operations in Wyoming, Kentucky, Virginia and West Virginia.
For about 600 workers at Blackjewel’s Belle Ayr and Eagle Butte mines in Campbell County, the anticipation is whether Contura Energy Corp.’s $20.6 million stalking horse bid to buy the Western assets, along with the Pax Surface Mine in West Virginia, will be accepted. If so, they could be recalled to work within the next week or two.
For another 1,100 coal miners at Blackjewel’s Appalachia operations, the wait is a little more nerve-wracking. Without a stalking horse bid on any or all of those assets, the company has said it will permanently close and liquidate anything not sold at auction.
The auction started Thursday and continues as of press time Friday morning. While he didn’t have information about the potential bids, Campbell County Commissioner Mark Christensen said the County Attorney’s Office has been monitoring the closed-door process.
Blackjewel’s attorneys and management team are working their way through bids for Eastern assets and expect to move on to the Western mines and Contura’s bid afterward, he said.
“The auction went way late last night and they started again this morning and are hoping to get to the Western assets afterward,” Christensen said.
There was no information available about whether the bids for any of the Eastern assets included buying mines to reopen them, buying equipment or any combination of the two.
Campbell County is allowed to monitor because it has a financial stake in a potential sale to Contura Energy, which owned the Belle Ayr and Eagle Butte mines before selling them to Blackjewel. Because Blackjewel began operations in December 2017 under Contura’s mining permit, Contura is still listed as owing Campbell County about $15.1 million in production taxes for 2018. Overall, Blackjewel listed more than $37 million in tax obligation to the county in its bankruptcy filing.
While Contura may eventually be given the green light to buy the mines back free and clear of past obligations, the county has to attempt to work payment of those taxes into any potential sale, Christensen said.
“I think it’s going to be really hard to collect against Contura for Blackjewel taxes and that’s unlikely,” he said.
He also said the county is wary about dealing with Contura as owner of the mines.
“I find it ironic and unfortunate in some ways that we’re dealing with Contura again here, because this is a company that’s already taken advantage of us once and (may be set up) to take advantage of us again,” Christensen said.
There has been no indication about when any decisions from the auction may be announced. The next hearing in U.S. Bankruptcy Court is set for Monday morning for the judge in the case to consider any potential sales.
Hoops reaches out again
As Blackjewel employees wait for word on the outcome of the auction, former company CEO and president Jeff Hoops Sr. has issued a written message to workers outlining how he believes Blackjewel’s creditors allegedly orchestrated a hostile takeover.
Hoops resigned from the company July 3, two days after his initial financing package to keep the company running crumbled. Without that $20 million loan, the mines had to be shut down abruptly and about 1,100 workers in the East had their final paychecks bounce.
Hoops refuted allegations that he’s taken money out of Blackjewel accounts for his personal use and that his “only goal all along was to keep people working and the mines operating,” according to his statement.
He said he “fought every step of the way as I was trying to do the right thing, which would have gotten each one of you paid and we would have all continued working.”
Hoops also apologizes to his former employees for how the company has imploded under his watch.
“I accept responsibility for being unable to lead this company through these difficult times,” he wrote. “Hold me responsible, but leave my family and other business relationships out of this matter. I know in my heart I fought for each of you and this company, and to have people threaten me and say I took out of this company for other projects hurts more than words can express …”
Hoops also seems to indicate he may take legal action against his former business partners and that he wants to share anything he recovers with employees.
“I cannot make up for what has happened … but my attention is going to turn to making these people pay for what they have done to us, and it is my intent for 50% of any recovery to be placed in an account to be shared equally by the employees harmed by these actions,” he wrote.
Having gone a month without a job or paycheck in the West, and six weeks for the Appalachia coal miners, many Blackjewel employees have blamed Hoops for allegedly mismanaging the company.
Christopher Pilsher, a former Blackjewel employee who worked mining Powder River Basin coal for a decade, said he’s heard that from many of his former coworkers. Although he’s found another job, he had to move away from Gillette to take it.
Pilsher said Hoops’ explanation and apology “is not going to change how I feel about the guy. I can’t even explain without apologizing to God what I think and how I feel about him.”
While he’s not a Hoops fan, Pilsher said he agrees that threats of violence against him and his family are “way out of line.”
“I’ve read that people are making threats against him or his family, and that’s just wrong,” Pilsher said. “I hope no harm comes to him or his family. In the end, he’ll get what’s coming to him. That’s good enough judgment for me.”
Hoops and 1,700 Blackjewel employees have something in common in that they’ve all be forced out of their jobs without notice and feel slighted. Many of his former coal miners also may be struggling with the same feelings Hoops expresses in his statement: “I am sick over this and cannot begin to understand why God would allow such a thing to happen.”