Lighthouse Resources Inc. – Seeks Approval of Bidding Procedures for Wyoming Real Property Assets; Proposes February 16th Auction

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December 23, 2020 – The Debtors filed a motion requesting each of a bidding procedures order and a sale order Sale [Docket No. 114]. The bidding procedures order would (i) approve bidding procedures for the sale of substantially all the Debtors’ Wyoming Real Property Assets (the “Sale”) and (ii) establish an auction/sale timetable culminating with an auction on February 16th and a sale hearing TBD. The sale order would authorize the Sale.

A stalking horse has not been named and the debtors' expressly reserve the right to "proceed to an auction without selecting a Stalking Horse Bidder."

At issue in this Motion is the sale, or sales, of real property and certain related assets in Wyoming owned by Debtors Big Horn Coal Company (“Big Horn”), Rosebud Coal Sales Company (“Rosebud”), and KCP Properties, Inc. (“KCP Properties”).

On December 9th the Debtors filed a similar motion in respect of their more significant Millennium Assets comprised of “substantially all of MBTL’s, Barlow Point’s, and Columbia Land’s (collectively, the ‘Millennium Debtors’) assets that comprise the Millennium Facility [ie, a 540-acre zoned heavy industrial site connected to an aquatic lease allowing for three docks in Cowlitz County on the Columbia River in Longview, Washington]." The Debtors had indicated that, given their dire liquidity position, failure to identify a stalking horse by December 16th would lead to a cessation of the Debtors' sales efforts and a likely motion to request dismissal of conversion of their Chapter 11 cases. That deadline has come and gone without naming a stalking horse although the Debtors have now filed the first iterations of their Plan and Disclosure Statement.

The current (Wyoming Real Property Assets) motion states, “The Debtors commenced these chapter 11 cases in accordance with a Restructuring Support Agreement with the goal of completing their mining activities, beginning the reclamation process, and monetizing their assets in order to maximize value for the benefit of the estates and their constituencies, which process includes selling certain assets pursuant to section 363 of title 11 of the United States Code (the ‘Bankruptcy Code’). The Debtors are pursuing the sale of two distinct sets of assets and operations in their chapter 11 cases. This Motion seeks approval of the bid procedures and ultimate sale of the Wyoming Real Property Assets, as defined below, which consists of surface ownership, buildings, structures, leases, and other assets located in Sheridan County, Wyoming and Carbon County, Wyoming. To effectuate a sale of the Wyoming Real Property Assets as efficiently as practicable, the Debtors seek to establish Court-approved bidding procedures for a sale of substantially all of the Wyoming Real Property Assets, which will facilitate an open, orderly, and efficient process for the solicitation and evaluation of bids during these chapter 11 cases.

To further increase the competitiveness of the bidding process, the Debtors seek authority, but not the requirement, to select one or more parties to act as a stalking horse bidder and to provide any such stalking horse bidder with bid protections in the form of a breakup fee and reasonable and documented out-of-pocket fees as set forth in any Stalking Horse Agreement (defined below) to be filed with the Court (the 'Bid Protections'). For the avoidance of doubt, the Debtors may proceed to an auction without selecting a Stalking Horse Bidder."

Proposed Key Dates

  • Objection Deadline: February 3, 2021
  • Bid Deadline: February 11, 2021
  • Auction (if necessary): February 16, 2021
  • Sale Objection Deadline: February 19, 2021
  • Sale Hearing: February [•], 2021

The Court scheduled a hearing on the motion for January 15, 2021, with objections due by January 8, 2021.

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