Armstrong Energy stumbles under tough market conditions
According to a press announcement, Armstrong Energy Inc. announced today that Armstrong and substantially all of its wholly owned subsidiaries have filed voluntary petitions for reorganization under chapter 11 in the Bankruptcy Court for the Eastern District of Missouri.
The company plans to transfer substantially all of its assets to a new entity to be jointly owned by Knight Hawk Holdings, LLC and the company’s secured noteholders, according to reports.
Armstrong is a producer of low-chlorine, high-sulfur thermal coal from the Illinois Basin, and operates both surface and underground mines. As of June 30, 2017, Armstrong controlled over 445 million tons of proven and probable coal reserves in Western Kentucky and currently operates five mines.
The company also owns and operates three coal processing plants and river dock coal handling and rail loadout facilities, which support its mining operations.
Armstrong expects its mining operations and customer shipments to continue in the ordinary course throughout the chapter 11 process.
Knight Hawk Coal, LLC plans to take control of Armstrong’s ongoing operations after the transaction closes. Knight Hawk operates as a coal mining company in Percy, Illinois. According to Knight Hawk’s website, Arch Coal holds a 49 percent stake in Knight Hawk.
The industry has continued to struggle under harsh market conditions. Arch Coal, the second largest U.S. coal mining company filed for bankruptcy protection in 2016. Peabody also filed for bankruptcy protection in March of this year.
High Risk Energy Investments
The White Law Group is investigating the liability that brokerage firms and financial advisors may have for recommending high risk energy investments, like Armstrong Energy, to their clients.
Brokerage firms that recommend energy investments are required to perform adequate due diligence on the investments. They must ensure a reasonable likelihood of success.
Brokerage firms must also evaluate whether the investments are suitable in light of their client’s age, net worth, investment experience, risk tolerance, and investment objectives. Firms that fail to perform adequate due diligence, or that make unsuitable recommendations, can be held responsible for losses in a FINRA arbitration claim.
If you suffered losses investing Armstrong Energy or another energy investment and would like to discuss your litigation options, please call The White Law Group at 888-637-5510 for a free consultation.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Vero Beach, Florida.
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