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The U.S. government agreed to a mine clean-up deal that allows coal producer Alpha Natural Resources to exit bankruptcy, despite concerns that Alpha will be unable to fund $400 million in commitments, Reuters reported yesterday. The agreement stems from an industry subsidy that allows coal companies to self-insure the environmental costs of mining, called self-bonding, rather than set aside cash or other collateral. Alpha had about $676 million in self-bonded mine clean-up costs, mostly in Wyoming and West Virginia, when weak coal prices pushed the company into bankruptcy in August, according to securities filings. Yesterday’s agreement was meant to assure that Alpha has the finances to restore mines to their natural setting and clean up polluted streams. The Department of Interior said in a statement that the deal will eliminate self-bonds for Alpha’s reclamation obligations and shift toward third-party financial assurance. Alpha will contribute to the plan over a decade and government lawyer Alan Tenebaum acknowledged that "the environmental agencies have some concern if this plan will succeed in the long term." Bankruptcy Judge Kevin Huennekens yesterday agreed to confirm Alpha’s chapter 11 plan of reorganization.

Fairway emerged from bankruptcy a little more than two months after the struggling grocer filed for chapter 11 protection, Crain’s New York Business reported today. The company succeeded in persuading lenders to cut Fairway’s borrowings in half in exchange for all the equity. The reorganized company also has a new board of directors that includes a former senior Whole Foods executive and the president of Rite Aid. Fairway is effectively swapping one private-equity owner for another: A consortium that includes Blackstone Group’s GSO Capital Partners is replacing Sterling Investment Partners. In 2007, Connecticut-based Sterling acquired Fairway for $150 million and borrowed heavily in an effort to transform the Manhattan-based grocery into a major regional supermarket chain. But that strategy hit the rocks after Whole Foods and Trader Joe’s moved into New York. Fairway never posted a profitable quarter after going public in 2013, and interest payments on its $280 million in debt devoured resources. Last year, the company tried to sell itself to more than 60 potential buyers, but there were no takers.

KaloBios Pharmaceuticals said on Friday that it has emerged from bankruptcy, USA Today reported on Saturday. The former Martin Shkreli-led company also said that it had acquired the rights to develop benznidazole from Savant Neglected Diseases for $3 million. Benznidazole is a drug that helps treat Chagas disease, an infectious disease that affects 6 million to 7 million people worldwide. It is mainly found in Latin America. KaloBios filed for bankruptcy last December shortly after Shkreli was fired as its CEO after being arrested for alleged fraud charges that were unrelated to his brief time at KaloBios. He has denied the allegations.

Investors who bought interests into drilling ventures from Primera Energy LLC, a San Antonio company once headed by Brian K. Alfaro, will recover nothing from a bankruptcy reorganization plan confirmed yesterday by a bankruptcy judge, MySanAntonio.com reported. Alfaro has been accused of defrauding investors in the sale of interests in various oil and gas drilling ventures. The investors have more than $18 million in claims, making them Primera’s largest group of creditors. They will receive nothing under the plan, which bankruptcy trustee Jason Searcy said is a liquidation. Searcy is reviewing possible legal claims against Alfaro. Read more. 

For a further analysis of commercial fraud, make sure to pick up a copy of ABI’s Fraud and Forensics: Piercing Through the Deception in a Commercial Fraud Case.