Rhino Resource Partners files for Chapter 11 bankruptcy relief

By Wendy Van Sickle

Columbus, Ohio, July 22 – Rhino Resource Partners LP said it and its subsidiaries have filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Ohio.

In connection with the filing, Rhino has obtained $11.75 million of post-petition financing and the support from a stalking horse bidder to acquire the company, according to a news release.

Rhino said it intends to use the bankruptcy process to implement an orderly sale of substantially all of its assets in an effort to maximize value for all stakeholders and allow for the prospect of continued employment and business opportunities at its operating locations.

“Rhino has been taking steps to improve both the performance and financial strength of our business,” Rick Boone, Rhino’s chief executive officer, said in the release. “While these strategies have gained positive momentum, they have not produced sufficient liquidity to continue operating our business and servicing our outstanding obligations.

“We are using Chapter 11 to maximize the value of our business and have entered into a stalking horse purchase agreement. The stalking horse bid is a baseline against which we will seek higher or otherwise better outcomes for the benefit of all of our stakeholders.”

The company said the $11.75 million debtor-in-possession loan from its prepetition lenders is intended to provide Rhino with liquidity necessary to operate its business.

Rhino filed a motion on Wednesday to authorize the execution of the asset purchase agreement with the stalking horse bidder and approve its sale process. Interested parties will have an opportunity to submit higher or better offers through the court-supervised competitive bidding process.

Rhino has retained Energy Ventures Analysis, Inc. as its financial adviser to assist with the sale process.

Rhino is an energy limited partnership based in Lexington, Ky., that is focused on coal and energy-related assets and activities, including energy infrastructure investments. Its sponsor is Royal Energy Resources, Inc.

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