In a nutshell (!), I inherited a portion of my great-grandfather’s mineral rights from under the family farm land in Southern Illinois which have had mining leases with several coal companies, the latest being Murray Energy that bought out The American Coal Company that operates the Galatia IL coal mine.
In our main story, yesterday I finally received the latest in a series of love letters from the law firm handling the Murray Energy Chapter 11 bankruptcy proceeding.
This particular package is kind of important because the cover letter has Robert Murray exhorting me to vote in favour of his bankruptcy plan.
This would be the same Robert Murray who found himself on the wrong side of John Oliver’s deep dive into how Murray reminds us all of the nasty coal barons of yesteryear, the details of how a SLAPP lawsuit works in practise, and the victory lap episode featuring an epic musical number when John Oliver beat Murray unanimously in the Supreme Court in Murray’s own back yard of West Virginia. You’ll definitely want to watch these deep dives on YouTube…they’re so entertaining and informative and feature a man-sized squirrel named Mr Nutterbutter who has a particular sentiment for Bob Murray that got Oliver sued in the first place!
Essentially, my new bestest pen-pal Bob wants me to vote in favour of his Chapter 11 bankruptcy plan in spite of these less-than-stellar features:
- He proposes to pay several classes of creditor (including the general unsecured creditors where my mineral lease rental checks that bounced right after bankruptcy landed) $0 to settle their claims.
- Voting in favour of the plan would also bind creditors to several release and excupation clauses (including a particularly nasty third-party one) that would pretty much bar any chance at ever recovering claims and damages.
- The chief beneficiary of the plan (not surprisingly!) is Bob Murray and his cronies as well as the bankruptcy lawyers and court that occupy the three classes who will be paid 100% of their claims.
- The Unsecured Creditors Committee (among others) have credible evidence that Bob and his friends pocketed millions in inflated salaries and dodgy transfers that are possibly illegal violations of the bankruptcy code.
- Even though Bob and his bestest buds effectively mismanaged Murray Energy into bankruptcy (helped by an absolutely abysmal economic environment for coal)…he and his friends stand to remain substantially in control of the entity that emerges from Chapter 11 for pennies on the dollar whilst the creditors get the screw.
It shouldn’t come as a surprise that the Unsecured Creditors Committee appointed by the court as a check against Murray overwhelmingly recommends all of the classes getting screwed by the proposed plan of reorganisation vote against the plan. Whether that’s enough to outweigh the vast amounts of money sloshing round the bankruptcy court and actually torpedo the plan remains to be seen.
But I will say this foray into a peripheral brush with bankrupcy law has convinced me that the original purpose of Chapter 11 has been utterly perverted into carte blanche to royally screw legitimate creditors and desperately needs to be reformed so that the management that enters the corporation into Chapter 11 is never allowed to stay in control on the other side of the proceeding. This whole process completely reeks and has been a complete pain in the arse…and I actually can generally follow what’s happening. I truly feel for those many creditors who have no clue, no hope of their interests being represented, and worst of all don’t deserve the screwing they’re likely to receive whether they like it or not.
For me, I have no problem voting a big fat NO on Bob’s “plan” to enrich himself and his cronies at everyone else’s expense.
And I’ll let Mr Nutterbutter tell Robert Murray what I really think of him and his friends in management…