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Creditors squabbling over Caesars Entertainment Operating Co.’s $20 billion reorganization asked Bankruptcy Judge Benjamin Goldgar to order them into mediation and to appoint either an active or retired bankruptcy jurist to supervise, but were refused, Bloomberg News reported yesterday. “You don’t need my permission,” Goldgar said yesterday. “Just click your heels together three times and say, ‘There is no place like mediation.’” Mediation is a great idea that is months overdue, Goldgar said. But last month, the local rules that gave federal judges power to order mediation in Northern Illinois were revoked. And there is no other legal authority to justify ordering everybody to sit down and negotiate, Goldgar said. The decision appeared to surprise the dozens of lawyers and other professionals who gathered in Chicago for the hearing. All the major bondholder groups and other lenders, who have been warring since the case was filed more than a year ago, had asked Goldgar for the mediation order. Without court-ordered mediation, creditors who feel left out of the company’s current reorganization proposal will be free to refuse to negotiate.

While Peabody Energy Corp. has spent months negotiating its debt with lenders, another $1.47 billion problem has surfaced that’s threatening to force the nation’s biggest coal miner down the same road as its bankrupt rivals: a practice called “self-bonding,” Bloomberg News reported today. Peabody is under attack by groups who’ve lodged complaints about the practice in five states in the past week. For decades, Peabody and other coal producers deemed to have strong balance sheets have saved cash under this privilege that excuses them from having to post collateral or obtain surety bonds that cover future mine clean-up costs. Peabody self-bonds in five states including Wyoming. As Peabody’s finances deteriorate amid a historic coal rout, calls are mounting from environmentalists, lawyers and federal officials for Wyoming and other states to crack down on the practice of self-bonding. It’s a push that may force coal miners to post billions of dollars for future cleanup costs just as they’re struggling to protect their share of the U.S. power market from cheap natural gas.

Arch Coal Inc.'s unsecured creditors have asked a judge to pare down a requested $275 million bankruptcy loan by more than half, saying the financing is both unnecessary and too expensive, Dow Jones Daily Bankruptcy Review reported today. In an objection filed on Tuesday, the creditors urged Judge Charles Rendlen III to reconsider an earlier interim order approving the loan, painting it as a gift to the company's lenders, who would take home substantial fees and interest. The creditors have asked the U.S. Bankruptcy Court in St. Louis to rethink its earlier order at a hearing next week, when Arch will present the loan for final approval. In court papers filed shortly after the company sought chapter 11 protection in January, Arch said that the loan is needed to fund its operations while in bankruptcy. Arch is continuing its mining activity and customer shipments throughout the reorganization process.

Members of United Mine Workers of America have approved a new collective bargaining agreement with the company that plans to acquire key assets of Walter Energy Inc., the Birmingham (Ala.) Business Journal reported today. The new agreement between UMWA and Coal Acquisition Inc. represents a critical step in the bankruptcy process for Walter Energy. Coal Acquisition is comprised of Walter's senior lenders, but the company hasn't unveiled its specific plans for Walter's assets. UMWA said the agreement will provide continued employment for hundreds of miners in central Alabama, as well as the potential for about 100 more to be called back to work in the coming months. The agreement also includes $25 million in funding for retiree health benefits, allowing them to continue through 2016, when legislation to permanently fix miners’ retiree health care and pension shortfalls would be passed by Congress.

As crude prices slide toward $25 a barrel, many oil companies have little choice but to start making even the steepest cost cuts they have avoided up until now, jettisoning every well that can't break even or isn't needed to keep the lights on, according to a Dow Jones Daily Bankruptcy Review analysis today. "Folks are coming to grips with the reality," said Dennis Cassidy, managing director at consulting firm AlixPartners, of the 20-month-and counting oil bust that many now fear will wipe out profits in 2016. U.S. and Canadian producers are losing at least $350 million a day at current prices, according to an AlixPartners analysis. Some Canadian companies are now warning they may be forced to shut down older oil-sands sites if prices fall even further. "For the month of January we did not make any money on our oil sands," said Brian Ferguson, CEO of Canadian producer Cenovus Energy Inc., in an interview. The U.S. benchmark oil price lost $1.24 a barrel on Thursday to settle at $26.21, down nearly 30 percent since the start of the year. Brent crude, the global oil benchmark, fell 78 cents to $30.06, a 20 percent drop so far this year.

Roughly a third of oil producers are at high risk of slipping into bankruptcy this year as low commodity prices crimp their access to cash and ability to cut debt, according to a study by Deloitte, the auditing and consulting firm, Reuters reported yesterday. The report, based on a review of more than 500 publicly traded oil and natural gas exploration and production companies across the globe, highlights the deep unease permeating the energy sector as crude prices sit near their lowest levels in more than a decade, eroding margins, forcing companies to make deep budget cuts and lay off thousands of workers. The roughly 175 companies at risk of bankruptcy have more than $150 billion in debt, with the slipping value of secondary stock offerings and asset sales further hindering their ability to generate cash, Deloitte said in the report. Read more. 

Get a better understanding of what happens when an oil, gas or other natural resources company goes bankrupt with ABI’s When Gushers Go Dry: The Essentials of Oil & Gas Bankruptcy. 

Chesapeake Energy Corp. is planning to pay $500 million of debt maturing in March, using a combination of cash on hand and other liquidity that may include its credit line, Bloomberg News reported on Friday. The second largest natural gas producer in the U.S. is also considering selling assets to shore up its capital so it can address more than $1 billion of debt coming due in 2017. Investors in Chesapeake grew nervous this week as its securities plummeted after a news report on Monday that restructuring lawyers at Kirkland & Ellis were advising the company. Chesapeake’s $500 million of 3.25 percent senior unsecured notes that need to be repaid on March 15 dropped as much as 22 percent on the news. Creditors are gearing up for negotiations over how to reorganize the energy producer’s debt load of about $10 billion. At least one group of unsecured bondholders has hired advisers to help evaluate the company’s assets in the U.S.

Paragon Offshore Plc, the oil services company spun off just as crude began its plunge, filed for bankruptcy protection after announcing deals to reorganize its debt and avoid protracted legal battles involving its former parent, Noble Corp., Bloomberg News reported yesterday. Houston-based Paragon is the latest casualty of an oil market that has fallen more than 70 percent since June 2014, just weeks before the company was split off from Noble, in one of the most ill-fated spinoffs of recent years. Paragon has said that it will use the chapter 11 process to execute a restructuring agreement it announced on Feb. 12. Read more. 

Get a better understanding of what happens when an oil, gas or other natural resources company goes bankrupt with ABI’s When Gushers Go Dry: The Essentials of Oil & Gas Bankruptcy.