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Judge OKs Lehigh Coal Loan
BY KENT JACKSON
POTTSVILLE REPUBLICAN & HERALD
August 15, 2009
A federal judge said Lehigh Coal and Navigation Co. can borrow $3.5 million to continue operating while in bankruptcy.
Judge John J. Thomas of U.S. Bankruptcy Court for the Middle District of Pennsylvania issued the order Tuesday.
"An immediate and critical need exists" for Lehigh Coal to obtain funds, Thomas wrote. Lehigh Coal's ability to continue its business and reorganize under Chapter 11 bankruptcy depends on the financing, he wrote.
The lender, BET Associates IV LLC, will have first priority of repayment, and the best interests of the company's estate are served by allowing the financing, the order says.
Lehigh Coal has equity in its assets, and the company granted a lien of its mineral rights and agreed to make monthly payments to the U.S. Department of Agriculture, the order says.
A budget sets how the company can spend the loan funds.
Creditors raised various objections to the loan, which the judge overruled.
In an involuntary bankruptcy petition filed July 15, 2008, against the company, three creditors - Primerock Capital of Pittsburgh, Bruce and Robbi Toll Foundation of Horsham, Montgomery County, and Douglas Tompkis of New York City - listed claims of $7.43 million.
Last week, Lehigh Coal recorded $163,000 in sales and reported having $229,000 in cash against general expenses of $185,000. The firm also spent $6,700 to remodel a coal breaker.
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wow i never thought of this happing .