Case 16-40120 Doc 760 Filed 05/05/16 Entered 05/05/16 22:45:39 Main Document Pg 1 of 79 UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MISSOURI EASTERN DIVISION In re: Chapter 11 ARCH COAL, INC., et al., Case No. 16-40120-705 Debtors.1 (Jointly Administered) DEBTORS’ JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 OF THE BANKRUPTCY CODE DAVIS POLK & WARDWELL LLP 450 Lexington Avenue New York, New York 10017 Telephone: (212) 450-4000 Facsimile: (212) 607-7983 Marshall S. Huebner Brian M. Resnick Michelle M. McGreal Kevin J. Coco Counsel to the Debtors and Debtors in Possession Dated: May 5, 2016 1 The Debtors and their respective employer tax identification numbers are listed in Schedule A hereto. Case 16-40120 Doc 760 Filed 05/05/16 Entered 05/05/16 22:45:39 Main Document Pg 2 of 79 TABLE OF CONTENTS PAGE ARTICLE 1 DEFINITIONS AND RULES OF INTERPRETATION Section 1.1. Definitions ............................................................................................... 1 Section 1.2. Rules of Interpretation ............................................................................ 21 Section 1.3. Computation of Time ............................................................................. 22 Section 1.4. References to Monetary Figures ............................................................. 22 Section 1.5. Exhibits; Schedules; Plan Supplement .................................................... 22 ARTICLE 2 TREATMENT OF DIP FACILITY CLAIMS; ADMINISTRATIVE EXPENSE CLAIMS AND PRIORITY TAX CLAIMS Section 2.1. Treatment of DIP Facility Claims ........................................................... 22 Section 2.2. Treatment of Contingent Securitization Obligations ............................... 23 Section 2.3. Treatment of Administrative Expense Claims ......................................... 23 Section 2.4. Treatment of Priority Tax Claims ........................................................... 24 ARTICLE 3 CLASSIFICATION AND TREATMENT OF OTHER CLAIMS AND INTERESTS Section 3.1. Classes and Treatment of Claims Against and Interests in the Debtors .... 25 Section 3.2. Treatment of Claims Against and Interests in the Debtors ....................... 27 Section 3.3. Treatment of Intercompany Claims ........................................................ 30 ARTICLE 4 ACCEPTANCE OR REJECTION OF THE PLAN Section 4.1. Voting of Claims .................................................................................... 30 Section 4.2. Presumed Acceptance of Plan ................................................................. 30 Section 4.3. Presumed Rejection of Plan .................................................................... 30 Section 4.4. Acceptance by Impaired Classes............................................................. 31 Section 4.5. Elimination of Vacant Classes ................................................................ 31 Section 4.6. Consensual Confirmation ....................................................................... 31 Section 4.7. Confirmation Pursuant to Section 1129(b) of the Bankruptcy Code ........ 31 Section 4.8. Severability; Reservation of Rights ........................................................ 31 ARTICLE 5 IMPLEMENTATION OF THE PLAN Section 5.1. Continued Organizational Existence ....................................................... 32 Section 5.2. Section 1145 Exemption ......................................................................... 32 Section 5.3. Authorization of New Common Stock .................................................... 32 Case 16-40120 Doc 760 Filed 05/05/16 Entered 05/05/16 22:45:39 Main Document Pg 3 of 79 Section 5.4. Cancellation of Existing Securities and Related Agreements and the Indentures .............................................................................................. 33 Section 5.5. Financing and Restructuring Transactions .............................................. 33 ARTICLE 6 PROVISIONS GOVERNING DISTRIBUTIONS Section 6.1. Disbursing Agent ................................................................................... 35 Section 6.2. Timing and Delivery of Distributions ..................................................... 35 Section 6.3. Manner of Payment Under Plan .............................................................. 37 Section 6.4. Undeliverable or Non-Negotiated Distributions ...................................... 38 Section 6.5. Claims Paid or Payable by Third Parties ................................................. 39 ARTICLE 7 FILING OF ADMINISTRATIVE EXPENSE CLAIMS Section 7.1. Professional Fee Claims ......................................................................... 39 Section 7.2. Administrative Expense Claims .............................................................. 40 ARTICLE 8 DISPUTED CLAIMS Section 8.1. Objections to Claims .............................................................................. 41 Section 8.2. Resolution of Disputed Claims ............................................................... 41 Section 8.3. Estimation of Claims and Interests ......................................................... 41 Section 8.4. Payments and Distributions for Disputed Claims .................................... 42 Section 8.5. No Amendments to Claims ..................................................................... 44 Section 8.6. No Interest ............................................................................................. 44 ARTICLE 9 EXECUTORY CONTRACTS AND UNEXPIRED LEASES Section 9.1. Rejection of Executory Contracts and Unexpired Leases ........................ 44 Section 9.2. Schedules of Executory Contracts and Unexpired Leases ....................... 44 Section 9.3. Categories of Executory Contracts and Unexpired Leases to Be Assumed ................................................................................................ 46 Section 9.4. Assumption and Rejection Procedures and Resolution of Treatment Objections .............................................................................................. 48 Section 9.5. Rejection Claims .................................................................................... 49 Section 9.6. Assignment ............................................................................................ 50 Section 9.7. Approval of Assumption, Rejection, Retention or Assignment of Executory Contracts and Unexpired Leases ............................................ 50 Section 9.8. Modifications, Amendments, Supplements, Restatements or Other Agreements ............................................................................................ 51 ii Case 16-40120 Doc 760 Filed 05/05/16 Entered 05/05/16 22:45:39 Main Document Pg 4 of 79 ARTICLE 10 PROVISIONS REGARDING GOVERNANCE OF THE REORGANIZED DEBTORS Section 10.1. Organizational Action ........................................................................ 51 Section 10.2. Organizational Documents ................................................................. 52 Section 10.3. Directors and Officers of the Reorganized Debtors ............................. 52 ARTICLE 11 EFFECT OF CONFIRMATION Section 11.1. Vesting of Assets................................................................................ 53 Section 11.2. Release of Liens ................................................................................. 53 Section 11.3. Releases and Discharges ..................................................................... 54 Section 11.4. Discharge and Injunction .................................................................... 54 Section 11.5. Term of Injunction or Stays ................................................................ 55 Section 11.6. Exculpation ........................................................................................ 56 Section 11.7. Release by the Debtors ....................................................................... 56 Section 11.8. Voluntary Releases by the Holders of Claims and Interests................. 57 Section 11.9. Injunction ........................................................................................... 58 Section 11.10. Setoff and Recoupment ...................................................................... 59 Section 11.11. Avoidance Actions ............................................................................. 59 Section 11.12. Preservation of Causes of Action ........................................................ 59 Section 11.13. Compromise and Settlement of Claims and Controversies .................. 60 ARTICLE 12 CONDITIONS PRECEDENT TO CONFIRMATION AND EFFECTIVENESS OF THE PLAN Section 12.1. Conditions to Confirmation ................................................................ 60 Section 12.2. Conditions to Effectiveness ................................................................ 60 Section 12.3. Waiver of Conditions to Confirmation or Effectiveness ...................... 61 ARTICLE 13 MODIFICATION, REVOCATION OR WITHDRAWAL OF THE PLAN Section 13.1. Plan Modifications ............................................................................. 62 Section 13.2. Revocation or Withdrawal of the Plan and Effects of Non- Occurrence of Confirmation or Effective Date .................................... 62 ARTICLE 14 RETENTION OF JURISDICTION BY THE BANKRUPTCY COURT............................................. 63 ARTICLE 15 MISCELLANEOUS Section 15.1. Exemption from Transfer Taxes and Recording Fees .......................... 64 Section 15.2. Expedited Tax Determination ............................................................. 65 Section 15.3. Payment of Statutory Fees .................................................................. 65 Section 15.4. Dissolution of the Creditors’ Committee............................................. 65 iii Case 16-40120 Doc 760 Filed 05/05/16 Entered 05/05/16 22:45:39 Main Document Pg 5 of 79 Section 15.5. Plan Supplement................................................................................. 65 Section 15.6. Claims Against Other Debtors ............................................................ 66 Section 15.7. Substantial Consummation ................................................................. 66 Section 15.8. Section 1125 of the Bankruptcy Code ................................................. 66 Section 15.9. Severability ........................................................................................ 66 Section 15.10. Governing Law .................................................................................. 66 Section 15.11. Binding Effect .................................................................................... 67 Section 15.12. Notices ............................................................................................... 67 Section 15.13. Reservation of Rights ......................................................................... 69 Section 15.14. Further Assurances ............................................................................. 69 Section 15.15. Case Management Order .................................................................... 69 Schedules Schedule A: Debtor Entities Schedule 9.2(a): Executory Contracts and Unexpired Leases To Be Assumed Schedule 9.2(b): Executory Contracts and Unexpired Leases To Be Rejected Schedule 11.11 Retained Avoidance Actions iv Case 16-40120 Doc 760 Filed 05/05/16 Entered 05/05/16 22:45:39 Main Document Pg 6 of 79 INTRODUCTION Pursuant to section 1121(a) of the Bankruptcy Code,2 the Debtors in the above-captioned jointly administered Chapter 11 Cases respectfully propose the Plan. The Debtors are the proponents of the Plan under section 1129 of the Bankruptcy Code. A complete list of the Debtors is set forth in Schedule A to the Plan. The Plan contemplates the reorganization of the Debtors and the resolution of all outstanding Claims against, and Interests in, the Debtors. Pursuant to section 1125(b) of the Bankruptcy Code, votes to accept or reject a plan of reorganization cannot be solicited from holders of Claims or Interests entitled to vote on a plan until a disclosure statement has been approved by a bankruptcy court and distributed to such holders. On [●], the Bankruptcy Court entered the Approval Order that, among other things, approved the Disclosure Statement, set voting procedures and scheduled the Confirmation Hearing. The Disclosure Statement that accompanies the Plan contains, among other things, a discussion of the Debtors’ history, businesses, properties and operations, projections for those operations, risk factors associated with the Debtors’ businesses and the Plan, and a summary and analysis of the Plan and certain related matters. ARTICLE 1 DEFINITIONS AND RULES OF INTERPRETATION Section 1.1. Definitions Unless the context requires otherwise, the following terms used in the Plan shall have the following meanings: 1. “7.000%/7.250% Senior Notes Indenture” means that certain indenture, dated as of June 14, 2011, by and among Arch Coal, Inc., as issuer, UMB Bank National Association, as trustee, and certain of the Subsidiary Debtors as guarantors, as the same may be amended, supplemented, revised or modified from time to time. 2. “7.000% Senior Notes” means those certain 7.000% senior notes due 2019 issued in the aggregate principal amount of $1,000,000,000 pursuant to the 7.000%/7.250% Senior Notes Indenture. 3. “7.000% Senior Notes Guarantee Claim” means a Claim asserted against a Subsidiary Debtor by a holder of, and on account of, a 7.000% Senior Note Due 2019. 4. “7.000% Senior Notes Parent Claim” means a Claim asserted against Arch Coal by a holder of, and on account of, a 7.000% Senior Note Due 2019. 5. “7.000% Senior Notes Trustee” means UMB Bank National Association, solely in its capacity as indenture trustee under the 7.000%/7.250% Senior Notes Indenture. 2 Capitalized terms shall have the meanings ascribed to them in Section 1.1 of the Plan. Case 16-40120 Doc 760 Filed 05/05/16 Entered 05/05/16 22:45:39 Main Document Pg 7 of 79 6. “7.250% Senior Notes Due 2020” means those certain 7.250% senior notes due 2020 issued in the aggregate principal amount of $500,000,000 pursuant to the 7.250% Senior Notes Indenture. 7. “7.250% Senior Notes Due 2020 Guarantee Claim” means a Claim asserted against a Subsidiary Debtor by a holder of, and on account of, a 7.250% Senior Note Due 2020. 8. “7.250% Senior Notes Indenture” means that certain indenture, dated as of August 9, 2010, by and among Arch Coal, as issuer, U.S. Bank National Association, as trustee, and certain of the Subsidiary Debtors as guarantors, as the same may be amended, supplemented, revised or modified from time to time. 9. “7.250% Senior Notes Due 2020 Parent Claim” means a Claim asserted against Arch Coal by a holder of, and on account of, a 7.250% Senior Note Due 2020. 10. “7.250% Senior Notes Due 2020 Trustee” means U.S. Bank National Association, solely in its capacity as indenture trustee under the 7.250% Senior Notes Indenture. 11. “7.250% Senior Notes Due 2021” means those certain 7.250% senior notes due 2021 issued in the aggregate principal amount of $1,000,000,000 pursuant to the 7.000%/7.250% Senior Notes Indenture. 12. “7.250% Senior Notes Due 2021 Guarantee Claim” means a Claim asserted against a Subsidiary Debtor by a holder of, and on account of, a 7.250% Senior Note Due 2021. 13. “7.250% Senior Notes Due 2021 Parent Claim” means a Claim asserted against Arch Coal by a holder of, and on account of, a 7.250% Senior Note Due 2021. 14. “7.250% Senior Notes Due 2021 Trustee” means UMB Bank National Association, solely in its capacity as indenture trustee under the 7.000%/7.250% Senior Notes Indenture. 15. “9.875% Senior Notes” means those certain 9.875% senior notes due 2019 issued in the aggregate principal amount of $375,000,000 pursuant to the 9.875% Senior Notes Indenture. 16. “9.875% Senior Notes Guarantee Claim” means a Claim asserted against a Subsidiary Debtor by a holder of, and on account of, a 9.875% Senior Note Due 2019. 17. “9.875% Senior Notes Indenture” means that certain indenture, dated as of November 21, 2012, by and among Arch Coal, as issuer, UMB Bank National Association, as trustee, and substantially all of the Subsidiary Debtors as guarantors, as the same may be amended, supplemented, revised or modified from time to time. 18. “9.875% Senior Notes Parent Claim” means a Claim asserted against Arch Coal by a holder of, and on account of, a 9.875% Senior Note Due 2019. 2 Case 16-40120 Doc 760 Filed 05/05/16 Entered 05/05/16 22:45:39 Main Document Pg 8 of 79 19. “9.875% Senior Notes Trustee” means UMB Bank National Association, solely in its capacity as indenture trustee under the 9.875% Senior Notes Indenture. 20. “Adequate Protection Payments” means any and all adequate protection payments that have been made to the First Lien Secured Parties on or prior to the Effective Date pursuant to paragraph 13(c)(iii) of the DIP Order. 21. “Adjustment Distribution” has the meaning set forth in Section 8.4(b)(iii) of the Plan. 22. “Administrative Expense Claim” means a Claim against any of the Debtors for payment of an administrative expense of a kind specified in section 503(b) of the Bankruptcy Code and entitled to priority pursuant to section 507(a)(2) of the Bankruptcy Code, including, but not limited to, Professional Fee Claims (but excluding, for the avoidance of doubt, DIP Facility Claims, Prepetition Lender Adequate Protection Claims and Contingent Securitization Obligations). 23. “Administrative Expense Claim Bar Date” means the date that is 30 calendar days after the Effective Date. 24. “Affiliate” has the meaning set forth in section 101(2) of the Bankruptcy Code. 25. “Allowed” means, when used in reference to a Claim, all or that portion, as applicable, of any Claim against any Debtor (i) that has been listed by such Debtor in the Schedules (as such Schedules may be amended by the Debtors from time to time) as liquidated in amount and not disputed or contingent, and for which no contrary or superseding Proof of Claim has been timely filed or that the Debtors do not timely object to in accordance with Section 8.1 of the Plan, (ii) that has been expressly allowed by Final Order or under the Plan, (iii) that has been compromised, settled or otherwise resolved pursuant to the Claims Settlement Procedures Order, the Bankruptcy Rules, Local Rules, another Final Order of the Bankruptcy Court or Section 8.2 of the Plan or (iv) that the Debtors do not timely object to in accordance with Section 8.1 of the Plan; provided, however, that Claims allowed solely for the purpose of voting to accept or reject the Plan shall not be considered “Allowed” for any other purpose under the Plan or otherwise, except if and to the extent otherwise determined to be Allowed as provided herein. Unless otherwise specified under the Plan, under the Bankruptcy Code, by order of the Bankruptcy Court or as otherwise agreed by the Debtors, Allowed Claims shall not, for any purpose under the Plan, include any interest, costs, fees or charges on such Claims from and after the Petition Date. 26. “Approval Order” means the Order (i) Approving Disclosure Statement; (ii) Approving Solicitation and Notice Materials; (iii) Approving Forms of Ballots; (iv) Establishing Solicitation and Voting Procedures; (v) Establishing Procedures for Allowing and Estimating Certain Claims for Voting Purposes; (vi) Scheduling a Confirmation Hearing and (vii) Establishing Notice and Objection Procedures, entered by the Bankruptcy Court on [●], together with any supplemental order(s) that may be entered by the Bankruptcy Court in connection therewith. 27. “Arch Coal” means Arch Coal, Inc. 3 Case 16-40120 Doc 760 Filed 05/05/16 Entered 05/05/16 22:45:39 Main Document Pg 9 of 79 28. “Arch Receivable” means Arch Receivable Company, LLC. 29. “Arch Sales” means Arch Coal Sales Company, Inc. 30. “Assumption Effective Date” means the date upon which the assumption of an executory contract or unexpired lease under the Plan is deemed effective, which in no case shall be later than the Effective Date unless otherwise agreed by the relevant Assumption Party. 31. “Assumption Party” means a counterparty to an executory contract or unexpired lease to be assumed and/or assigned by the applicable Debtor under the Plan. 32. “Avoidance Actions” means any and all actual or potential Claims and Causes of Action to avoid a transfer of property or an obligation incurred by any of the Debtors pursuant to any applicable section of the Bankruptcy Code, including sections 502(d), 544, 545, 547, 548, 549, 550, 551, 553(b) and 724(a) of the Bankruptcy Code, or under similar or related state or federal statutes and common law. 33. “Ballot” means the voting form distributed to each holder of an Impaired Claim entitled to vote on the Plan, on which the holder is to indicate acceptance or rejection of the Plan in accordance with the Voting Instructions and make any other elections or representations required pursuant to the Plan or the Approval Order. 34. “Bankruptcy Code” means title 11 of the United States Code, as now in effect or hereafter amended, to the extent applicable to the Chapter 11 Cases. 35. “Bankruptcy Court” means the United States Bankruptcy Court for the Eastern District of Missouri, Eastern Division, and, with respect to withdrawal of any reference under section 157 of title 28 of the United States Code and/or order of a district court pursuant to section 157(a) of title 28 of the United States Code with respect to the Chapter 11 Cases, the United States District Court for the Eastern District of Missouri. 36. “Bankruptcy Court’s Website” means www.moeb.uscourts.gov. 37. “Bankruptcy Rules” means the Federal Rules of Bankruptcy Procedure, each as now in effect or as hereafter amended, to the extent applicable to the Chapter 11 Cases. 38. “Bar Date Order” means the Order Establishing Deadlines for Filing Proofs of Claim and Approving the Form and Manner of Notice Thereof, entered by the Bankruptcy Court on April 8, 2016 [ECF No. 674], as it has been or is hereafter modified, amended, supplemented or extended from time to time during the pendency of the Chapter 11 Cases. 39. “Beneficial Ballots” means the ballots upon which Beneficial Holders shall indicate to Nominees their acceptance or rejection of the Plan in accordance with the Voting Instructions. 4 Case 16-40120 Doc 760 Filed 05/05/16 Entered 05/05/16 22:45:39 Main Document Pg 10 of 79 40. “Beneficial Holder” means, with respect to any security, the Entity having the Beneficial Ownership of such security. 41. “Beneficial Ownership” means, with respect to any security, “beneficial ownership” of such security as determined pursuant to Rule 13d-3 of the Exchange Act. 42. “Board” means, as of any date prior to the Effective Date, Arch Coal’s then-existing board of directors, including any duly formed committee thereof. 43. “Business Day” means any day other than a Saturday, a Sunday, a “legal holiday” (as defined in Bankruptcy Rule 9006(a)) or any other day on which banking institutions in New York, New York are required or authorized to close by law or executive order. 44. “Cash” means legal tender of the United States of America or equivalents thereof, including, without limitation, payment in such tender by check, wire transfer or any other customary payment method. 45. “Case Management Order” means the Order Establishing Certain Notice, Case Management and Administrative Procedures, entered by the Bankruptcy Court on January 21, 2016 [ECF No. 155], as it has been or is hereafter modified, amended, supplemented or extended from time to time during the pendency of the Chapter 11 Cases. 46. “Cause of Action” means, without limitation, any and all actions, proceedings, causes of action, controversies, liabilities, obligations, rights, rights of setoff, recoupment rights, suits, damages, judgments, accounts, defenses, offsets, powers, privileges, licenses, franchises, Claims, including alter-ego claims and claims under chapter 5 of the Bankruptcy Code as well as any claims or rights created pursuant to sections 301 and 541 of the Bankruptcy Code upon the commencement of the Chapter 11 Cases on the Petition Date, counterclaims, crossclaims, affirmative defenses and demands of any kind or character whatsoever, whether known or unknown, asserted or unasserted, reduced to judgment or otherwise, liquidated or unliquidated, fixed or contingent, matured or unmatured, disputed or undisputed, secured or unsecured, assertable directly or derivatively, existing or hereafter arising, in contract or in tort, in law, in equity or otherwise in any court, tribunal, forum or proceeding, under any local, state, federal, foreign, statutory, regulatory or other law or rule. 47. “Change-in-Control Agreement” has the meaning set forth in Section 9.3(d) of the Plan. 48. “Chapter 11 Cases” means the cases under chapter 11 of the Bankruptcy Code commenced by the Debtors on or after the Petition Date (and not otherwise dismissed), currently pending in the Bankruptcy Court with the case numbers as set forth in Schedule A to the Plan, that are jointly administered in the case styled In re Arch Coal, Inc., et al., Case No. 16-40120-705. 49. “Claim” means a “claim” as defined in section 101(5) of the Bankruptcy Code. 5