The bank debt of bankrupt James River Coal Co. was actively changing hands with the price for the paper jumping from the 79 range into the 85-86 context over the course of last week. The specific reasons for the recent uptick could not be determined. But traders noted that commodities, including coal, have been stronger and if EBITDA comes back the paper could be worth par. Wachovia Securities is the administrative agent for the pre-petition bank debt claims, which have about $209 million in principal claims.
Under the plan of reorganization, senior secured lenders are slated to receive $100 million of seven-year restructured term debt and 100% of the common stock in the reorganized company. The common stock will be subject to dilution by up to 15% due to the issuance of options. The company is on track to get its disclosure statement approved at a hearing Wednesday. James River will then look to receive confirmation on its plan of reorganization by mid April with a May 1 emergence date. Peter Socha, ceo of James River, was traveling and could not be reached for comment.