DALLAS, Nov. 19, 2015 /PRNewswire/ -- Dominion Resources
Black Warrior Trust (NYSE: DOM), ("Dominion") announced today that
it had not received any proceeds from Walter Energy, Inc. as of
November 13, 2015, the scheduled date
of distribution to the Trust. Therefore, there will be no
distribution to unitholders of record as of November 30, 2015.
Walter filed a petition for relief under Chapter 11 of the U.S.
Bankruptcy Code on July 15, 2015. For the periods from
July 15, 2015 through September 30, 2015, Walter collected the Trust's
portion of the proceeds, totaling $896,583, but continues to forego paying the
Trust's production proceeds.
For the periods from April 1, 2015
through June 30, 2015, Walter
collected the Trust's portion of the proceeds, totaling
$983,828, but did not distribute the
Trust's production proceeds claiming relief under its bankruptcy
filing.
For the period from July 1, 2015
through July 15, 2015, Walter
collected the Trust's portion of the proceeds, totaling
$164,462, but did not distribute the
Trust's production proceeds claiming relief under its bankruptcy
filing. To date, Walter has withheld approximately
$2.045 million of the Trust's
production proceeds.
The Trustee has received no judicial assurances regarding the
status of distributions relating to production for periods after
July 15, 2015.
On the date the bankruptcy was filed – in a series of "first day
motions" – the Debtors filed motions relating to the use of cash
collateral and cash management. The motions contend that cash
held by the Debtors and certain other property constitute
collateral of the Debtors' lenders subject to protective liens and
permit use of a "zero balance" cash management system where
receipts from operations including Debtors' gas operations could be
swept into certain concentration or disbursement accounts
containing other cash. The motions do not separately
segregate or provide separate treatment for production proceeds
relating to the Trust's overriding royalty interests. In
response, the Trustee filed: (i) a motion asking the court to
reconsider and amend the Debtors' cash management order to provide
for segregation of production proceeds relating to the Trust's
overriding royalty interests, (ii) an objection to the cash
collateral motion seeking protections based on the Debtors' use of
the production proceeds, and (iii) a separate lawsuit seeking
various forms of relief including a temporary restraining order for
segregation of production proceeds relating to the Trust's
overriding royalty interests and judicial confirmation that such
proceeds are not property of the Debtor's bankruptcy
estate.
A hearing was held August 18, 2015
where the court denied the Trust's motion to reconsider the
Debtors' cash management order and denied the Trust's request for a
temporary restraining order. Subsequently, the Trustee
dismissed the lawsuit, but continued to urge its objections in
connection with the Debtors' cash collateral motion. A
hearing on the Trust's objection (and other objections) to the
Debtors' cash collateral motion was held September 2 and 3, 2015. On September 14, 2015, the court issued its ruling
on the Debtors' cash collateral motion and denied the Trustee's
request for protections based on the Debtors' use of the production
proceeds including segregation of the production proceeds and a
requirement for continued distributions of production proceeds to
Dominion in the ordinary course of business.
On November 10, 2015, there was a
hearing on Debtor's Motion to Reject the Executory Contract between
the Debtor and the Trust. At the end of the hearing, the
Court requested Findings of Fact and Conclusions of Law to be
submitted on November 20th by
2:00 p.m.
The Trustee continues to seek protection of the royalty payments
and assets of the Dominion Resources Black Warrior
Trust.
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SOURCE Dominion Resources Black Warrior Trust
