Westmoreland Coal Company – Approval of Sale Procedures and APA Sought

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October 18, 2018 – Westmoreland Coal Company (the “WLB Debtors”) requested Court authority to (a) enter into and perform under the stalking horse purchase agreement entered into with an entity formed on behalf of the WLB Debtors’ prepetition secured creditors (the “Stalking Horse Purchase Agreement”) and (ii) adopt bidding procedures with respect to the sale of substantially all of its assets [Docket Nos. 208 and 208-1]. The motion explains, “As described in the First Day Declaration, following months of good-faith, arm’s-length discussions with their secured creditors, the WLB Debtors commenced these chapter 11 cases to effectuate a restructuring with the support of the Consenting Stakeholders on the terms set forth in the RSA. More specifically, the RSA contemplates a going concern sale of substantially all of the WLB Debtors’ assets pursuant to a chapter 11 plan, and the Consenting Stakeholders have agreed to provide the Stalking Horse Bid for certain of the WLB Debtors’ assets, in the form of a credit bid by the Prepetition Secured Parties pursuant to the terms of the Stalking Horse Purchase Agreement. The WLB Debtors and the Consenting Stakeholders have memorialized the terms of the Stalking Horse Bid in the Stalking Horse Purchase Agreement. The proposed sale would preserve the WLB Debtors’ operations and over a thousand jobs. The WLB Debtors have determined, in the exercise of their business judgment, that the best way to maximize the value of their assets for all stakeholders is to market-test the Stalking Horse Bid through an auction process and to expeditiously sell the assets to the highest or otherwise best bidder pursuant to the Plan….The WLB Debtors also seek authority to enter into the Stalking Horse Purchase Agreement with the Stalking Horse Bidder, which will provide a floor bid for the auction of the WLB Debtors’ assets. Importantly, there is no break-up fee or expense reimbursement in connection with the Stalking Horse Purchase Agreement, which will serve as a competitive baseline bid for the auction for the WLB Debtors’ assets. The WLB Debtors will market test the Stalking Horse Bid to ensure that the WLB Debtors obtain the highest or otherwise best offer or combination of offers for the WLB Debtors’ assets from either the Stalking Horse Bidder or other bidders. If approved, the proposed Bidding Procedures will enable the WLB Debtors to expeditiously complete their chapter 11 restructuring.” 

The notice proposes the following timeline: (i) a bid deadline of January 15, 2019, (ii) an auction, if required, to be held on January 15, 2019 and (iii) a sale hearing to approve and authorize the sale to be held on February 13, 2019, with objections due by January 15, 2019.

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