Having been floating just below the surface for over a year, it looks like the once proud Arthon Industries Limited and their offspring, Coalmont Energy, are about to sink completely.
The Arthon web site shows a February, 2012 entry about a multi year engagement starting in April and a completion in 2013/14. However, after an initial bankruptcy order dated 2013-11-29 filed with the Office of the Superintendent of Bankruptcy Canada, nothing hopeful has surfaced. It’s been up and down – but mostly down.
Although we usually call them Arthon, there are actually six entities involved and together they are called “the petitioners”. Interestingly, the stay of proceedings order indicates that there are no less than three Arthons involved.
For a while it looked like there was some hope. There was an order granting the Petitioners the protections afforded by a stay of proceedings until December 20, 2013 while they pursue restructuring initiatives under the Companies’ Creditors Arrangement Act (CCAA). This initial stay of proceedings was extended to July 31, 2014 for Arthon Industries Limited, Arthon Equipment Ltd., Coalmont Energy Corp., Robeka Projects Inc. and 0755049 B.C. Ltd. and to June 13, 2014 for Arthon Contractors Inc.
There are still three weeks to go until the deadline given the first five entities, but Arthon Contractors has hit the wall and there will be a “first meeting of creditors” July 14, 2014, 11:00 in Kelowna. A form 68 was filed last week. This document states that creditors must prove their claims against the estate of the bankrupt in order to share in any distribution of the proceeds realized from the estate.
Any chance of the remaining entities coming up with a plan before the next deadline doesn’t seem likely. Coalmont Energy has been “preserving and protecting” the Basin Mine while it seeks a joint venture partner to fund capital upgrades. However, it has been unsuccessful in locating a purchaser.
It is not clear what is to be gained by creditors since already a month ago an application response of Vitol Inc. stated that “Arthon has little to no assets remaining.” The document goes on to say that “During the past five months, the Petitioners have made no real progress towards a plan or arrangement.” The situation is that the secured debt has been refinanced, and most equipment sold. “The Basin Mine sale process has failed.”
Arthon and Coalmont Energy may effectively be out of operation, but that won’t be the end of the story. There is still a very expensive haul road, a multimillion dollar processing plant, and coal in the ground. §