Coal producer Armstrong Energy files for Chapter 11 bankruptcy protection

Armstrong Energy, a Clayton-based coal producer, announced Wednesday that it had filed for Chapter 11 bankruptcy protection, the latest such move in an industry that continues to face harsh market conditions.

Wednesday’s announcement makes the company’s slide into the Chapter 11 process official, after it had initially signaled in an August filing with the U.S. Securities and Exchange Commission that it may need to reorganize under the protection of federal bankruptcy court, citing “recurring losses from operations.”

Armstrong currently operates five mines in western Kentucky, and bills itself as a leading producer in the Illinois Basin, the coal-rich geologic region that also includes parts of Southern Illinois and Indiana.

The company said in a statement that the action would allow for its assets to be transferred to “a new entity to be jointly owned by Knight Hawk Holdings and the company’s secured noteholders.” Knight Hawk is a fellow Illinois Basin coal producer and will assume control of Armstrong’s ongoing operations after the process closes. Creve Coeur-based Arch Coal holds a 49 percent stake in Knight Hawk, according to Knight Hawk’s website.

 Armstrong officials said that mining operations and shipments would continue.

Read more: St. Louis Post-Dispatch

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