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Coal Company Files for Bankruptcy Following Difficult Year


Arch Coal has filed for Chapter 11 bankruptcy protection after finding that it struggles with income following the shift from coal use to natural gas by local electrical companies. Natural gas also costs less than coal, which makes it a more affordable option for these companies.

Chapter 11 bankruptcy doesn't mean the company is going under, though. In fact, it's giving this company time to rework its finances and get back to work. Because of the way Chapter 11 bankruptcy allows for restructuring finances, companies that enter it have a chance to change their debts and profits around, coming out of the bankruptcy only when a good financial plan has been followed through and when company debt is manageable.

In this case, the Chapter 11 bankruptcy won't affect the workers on site; the company has stated that the mines will stay open and employees will be able to work for the foreseeable future. Employees shouldn't be immediately affected by the bankruptcy process, although it could be a possibility in the future.

The company has, fortunately, been able to make deals with its vendors to reduce its debts by over $4.5 billion. It currently has $6.5 billion in debt but shows $5.8 billion in assets. If your company is in a similar situation, then this could be an option for you, too. With help from your attorney, you can file for Chapter 11 bankruptcy protection and work with your creditors to eliminate bad debts and to reduce payments; extending or changing contracts can also help you come out in the green when you emerge from bankruptcy.

Source: WBNS-10TV, "Arch Coal files for Chapter 11 bankruptcy protection," Jan. 11, 2016