Longview Power files for bankruptcy reorganization
MAIDSVILLE, W.Va. -- Longview Power LLC and a collection of related companies have filed for Chapter 11 bankruptcy, seeking court protection will they reorganize their debts.
The company filed for the reorganization on Friday, the same day that it was due to make a key interest payment on its debt, court filings show.
Longview operates a coal-fired power plant outside Morgantown and, through related companies including Mepco LLC, produces coal at mines in West Virginia and Pennsylvania.
In a bankruptcy filing in federal court in Delaware, Longview blamed its financial problems in part on mismanagement by contractors it said delayed the plant opening by more than nine months, until December 2011. Longview said it has experienced continued outages that have prevented it from operating the plant at full capacity or selling power on anything other than a "day-ahead" basis.
Longview's bankruptcy filing also cited the ongoing decline in the coal market, including an oversupply of coal and "increased costs associated with environmental and regulatory compliance and pressures resulting from fierce industry competition with natural gas-fired power facilities."
"After careful consideration of available alternatives, the company determined that filing for Chapter 11 was a necessary and prudent step that allows us to strengthen and operate our businesses without interruption while continuing to restructure the company's balance sheet," said Jeffery Keffer, CEO of Longview Power.
Mepco's CEO, Jim Laurita Jr., is chairman of the West Virginia Coal Association.