V&E Advises Cloud Peak Energy in Connection With Sale of Assets to Navajo Transitional Energy Company
Vinson & Elkins advised Cloud Peak Energy Inc. and certain subsidiaries (collectively, “Cloud Peak”) in connection with the sale of substantially all their operating assets to Navajo Transitional Energy Company, LLC (“NTEC”), a wholly owned subsidiary of the Navajo Nation, as part of Cloud Peak’s chapter 11 bankruptcy cases pending in the District of Delaware styled In re Cloud Peak Energy Inc. et al., Case No. 19-11047 (KG).
The key financial terms of the consideration provided by NTEC include, among others, a $15.7 million cash payment, a $40 million note, a 5-year term royalty on future tons produced, and the assumption of pre and post-petition tax liabilities and federal and state coal royalty payments, over $400 million in reclamation obligations, and up to $20 million in post-petition accounts payables. It is anticipated that Cloud Peak will seek confirmation of a chapter 11 plan on December 5, 2019. The sale closed on Thursday, October 24, 2019.
The team was led by partners David Meyer, Paul Heath, Shelley Barber and John Kupiec with assistance from senior associates Jessica Peet and Lauren Kanzer and associate Steven Zundell.