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Archive for the ‘Arch Coal’ Category

Mark Heiden Losses at Wedbush? Aidikoff, Uhl & Bakhtiari Announces the Filing of a FINRA Arbitration Claim Seeking More than $1.1 Million On Behalf Of Former Customers of Wedbush Securities, Inc. broker Mark Heiden

Aidikoff, Uhl & Bakhtiari announces the filing of a FINRA arbitration seeking more than $1.1 million and its continuing investigation of the sales practices of Mark Heiden for his management of client accounts and the overconcentration of energy related stocks investments:

  • Energy XXI Bermuda Ltd.
  • Clearbridge American Energy MLP
  • Goldman Sachs MLP Energy
  • Arch Coal
  • Seadrill

We are currently investigating whether all material risks of the recommended investments were disclosed to clients as well as whether Wedbush broker, Mark Heiden, implemented an appropriate risk management strategy.

“Mark Heiden’s transactions in the energy sector raise serious concerns about the level of supervision Wedbush chose to exercise,” added Philip Aidikoff.

“The level of concentration in energy related securities posed a risk that customers could not appreciate,” said Ryan Bakhtiari.

To discuss your options please contact an attorney below.

Aidikoff, Uhl & Bakhtiari represents retail and institutional investors around the world in securities arbitration and litigation matters. Attorneys for the firm have appeared before the Financial Industry Regulatory Authority (FINRA) and in numerous state and federal courts to resolve financial disputes between customers, banks, brokerage firms and other financial institutions.

Philip M. Aidikoff, pma@aublaw.com
Ryan K. Bakhtiari, rkb@aublaw.com
Aidikoff, Uhl & Bakhtiari
(800) 382-7969 Toll Free or (310) 274-0666

Arch Coal subsidiary lay off workers at Colorado’s West Elk mine

Lagging bituminous coal sales from the West Elk mine in Colorado has forced an Arch Coal subsidiary to lay off 80 workers, the company said Monday.

Arch Coal subsidiary Mountain Coal had announced the cuts amid “continuing challenges in domestic and international thermal coal markets,” Saint Louis-based spokeswoman Logan Bonacorsi said.

“Up to this point, the operation has managed the current market downturn through cost-reduction initiatives, efficiency improvements, and natural attrition,” Bonacorsi said. “However, lack of incremental coal demand has forced us to take further action to better align production and staffing levels with customer needs, and to ensure West Elk remains competitive long-term.”

Colorado’s largest mine by production, West Elk produced only 521,527 st of bituminous coal in Q1 2016, down 55.4% from the same quarter in 2015, according to US Mine Safety & Health Administration data.

Its mine employee count dropped to 233 from 300 employees over that same period.

The mine, located in Somerset, Colorado, has seen dwindling contracts from customers, and delivered only 258,587 st of bituminous coal in the first three months of the year, according to US Energy Information Administration data.

By comparison, the mine had delivered 364,430 st of coal in the first three months of 2015 and 938,232 st of coal during the same period in 2014, according to the EIA.

Investor Losses to Follow Arch Coal Bankruptcy

Arch Coal Inc. joined the ranks of bankrupt coal miners as the U.S. continues to shift toward cheaper, cleaner-burning natural gas, threatening the dominance of one of the world’s dirtiest sources of energy.

The holder of the second-largest reserve of coal in the U.S. filed for creditor protection Monday. The company said it has an agreement with a majority of its senior lenders to erase $4.5 billion in debt from its balance sheet and allow it to keep operating without interruption. Arch has been losing money since 2012.

The Sierra Club called the filing “the end of an era,” but another environmentalist group cautioned that the bankruptcy could affect reclamation — the restoration of land after coal is extracted.

“The announcement significantly reduces the likelihood that several Arch Coal projects across Montana and Washington State will move forward,” the Sierra Club said in a statement. Arch dramatically increased pay for its executives while failing to adapt to public health concerns about coal pollution and the increasing demand for clean energy, the San Francisco-based group said.

 Arch owns the country’s second-largest coal mine, Black Thunder in Wyoming’s Powder River Basin. Powder River Basin Resource Council, a preservation group, said the company’s more than 90 square miles of coal mines in the area have a $458 million reclamation liability.

“State and federal taxpayers must not be left with the bill,” the group said in a statement.

The court filing listed $5.8 billion in assets and $6.5 billion in debt. The company has agreed to the terms of a $275 million loan to keep it operating during bankruptcy. The loan includes a $75 million carve-out for environmental reclamation obligations, according to court papers.

Coal’s share of electricity generation in the U.S. fell to 30 percent in April, as the historically popular fuel was overtaken by gas for the first time. Coal still generated more than 40 percent of electricity globally and is used in the production of 70 percent of the world’s steel, according to the World Coal Association.

St. Louis-based Arch’s output has put it among the top five U.S. metallurgical coal producers and made it the second-biggest thermal coal miner, behind Peabody Energy Corp.

As of the end of 2014, Arch estimated that its pension benefit obligations were $353 million, according to court filings. The company said it doesn’t expect its pension plan, which is well-funded, to be affected during the bankruptcy.

The bankruptcy filing followed in-fighting among hedge funds holding different layers of Arch debt. GSO Special Situations Master Fund LP, a Blackstone Group LP affiliate, even filed a lawsuit seeking to clear the way for a debt exchange.

Arch has also had to cope with the effects of its 2011 purchase of International Coal Group Inc. The $3.4 billion acquisition, made when metallurgical coal was selling for $330 a metric ton, increased its exposure to a thermal coal from Appalachia, which has been particularly hard hit as cheaper thermal coal is mined in the Midwest.

Central Appalachian coal fell 13 percent in 2015, capping a fifth annual decline on the New York Mercantile Exchange. Prices closed at $44.33 a metric ton on Friday.

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