The company told Reuters it was planning a bankruptcy court-supervised auction within the next two months for its assets, where Black Diamond’s senior lenders can submit a bid.
"If successful, the senior lenders would own a significant majority of the company's equity upon emergence," representatives said.
Chief executive officer Larry Hull added: "I am optimistic that Black Diamond will exit bankruptcy as a going concern during the first half of 2009."
An involuntary petition was filed against the producer by CIT Capital USA, Prudential Insurance Co of America and The CIT Group/Commercial Services last February. The motion to convert the case to Chapter 7 was submitted last December by Bull Creek Coal, Floyd County Resources and Prater Creek Coal.
The news service said last February that Black Diamond, a relatively small regional operator that controls about 200 million tons of reserves, owed more than $US150 million against its revenues for 2007, which totalled about $100 million. At that time, its primary contract miner threatened to stop operations for non-payment.
Headquartered in Prestonburg, Kentucky, Black Diamond produces output for utility and industrial customers in the central and southeastern United States and has an annual production of more than 2 million tons from three surface mines and ten underground mines in eastern Kentucky.
