Arch Coal

According to Reuters, Arch Coal which is the second-largest U.S. coal miner has filed for Chapter 11 bankruptcy in mid-January. The investment attorneys at Gana Weinstein LLP continue to report on investor losses in commodities related investments. Our firm is investigating potential securities claims against brokerage firms over improper sales practices related to recommendations in commodities products such as bonds, exchange traded notes (ETNs), structured notes, private placements, mutual funds, and individual stocks.

Arch Coal plans to cut $4.5 billion in debt from its balance sheet after suffering through a prolonged coal market downturn. Arch Coal has about 4,600 employees. As we have previously reported, coal related companies around the world are being pushed to the brink of bankruptcy due to the falling prices of commodities. Other bankruptcy filings this year include Walter Energy (Stock Symbol: WLTGQ), JW Resources, Patriot Coal, Xinergy, and James River Coal Co. among others. According to Bloomberg, more than three dozen coal operations have filed bankruptcy in just over three years. Due to a combination of factors the combined market value of U.S. coal company shares shrank to $12 billion in late July 2015 from $78 billion in 2011.

In the case of Arch Coal the company became saddled with debt since its 2011 acquisition of International Coal Group and then was unable to overcome a range of negative market trends including a drop in coal prices. The company expects its mining operations and shipments to continue uninterrupted through the reorganization process. According to sources, 25 percent of U.S. coal industry is currently in bankruptcy.

Coal related companies around the world are being pushed to the brink of bankruptcy due to the falling prices of commodities. For instance, the world’s third largest publicly traded coal company, Peabody Energy Corporation (Peabody) (Stock Symbol: BTU), has seen its stock price plummet from over $1,000 per share in 2011 to under $14 today. In addition, the largest U.S. coal producer, Alpha Natural Resources (Stock Symbol: ANRZ), filed Chapter 11 in the U.S. Bankruptcy Court for the Eastern District of Virginia in Richmond. Commenters are speculating that unless there are restructurings for Arch Coal (Stock Symbol: ACI) and Peabody they could be the next two coal producers to file for bankruptcy protection.

Other bankruptcy filings this year include Walter Energy (Stock Symbol: WLTGQ), JW Resources, Patriot Coal’s second bankruptcy filing, Xinergy, and James River Coal Co. Berau Capital Resources submitted a Chapter 15 petition on July 10, and Glencore (Stock Symbol: GLEN) has undergone major restructuring amidst the collapse of its stock price.

According to Bloomberg, more than three dozen coal operations have filed bankruptcy in just over three years. Due to a combination of factors the combined market value of U.S. coal company shares shrank to $12 billion in late July 2015 from $78 billion in 2011.

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