America West Resources, Inc.(fka AWSRQ)

[HDOGTX]

America West to Sell Assets to Rhino-Owed Utah Mining Operation
Last update: 5/14/2013 12:06:12 PM


By Stephanie Gleason


Utah mining company America West Resources Inc. (AWSRQ) will be forced to sell its assets to a company owned by Rhino Resource Partners LP (RNO) for $1.25 million after a bankruptcy judge ruled to enforce the sale Monday.
America West opposed the sale during the hearing, as did its secured creditor Denly Utah Coal LLC, which is owed $22.57 million in pre-petition debt. The company said in court documents that the parties had never agreed on the assets being sold and that "a material disagreement remains."
Castle Valley's bid was named the winner during an auction for America West's assets, but the offer was for "mobile equipment and power centers" that weren't specifically identified, America West said. The offer was complicated by the fact that Castle Valley participated in the auction telephonically, it said.
Now, America West and Castle Valley disagree on what items were included in the purchase. The list of items Castle Valley believes is included in the purchase leaves the bid "grossly undervalued" and "neither higher nor better than even their original bid," America West said.
However, Judge Bruce Markell of the U.S. Bankruptcy Court in Las Vegas approved the sale of substantially all of America West's assets to Castle Valley Monday. Calling Castle Valley's offer "fair and reasonable" and "the highest or otherwise best offer," in the order, Judge Markell directed America West to sell its assets to Castle Valley.
Castle Valley, another Utah coal-mining operation, was acquired by Rhino Resources in 2010. The complex has 26.1 million tons of coal reserves, according to Rhino's website.
America West, which filed for Chapter 11 protection in February, is the parent company of Hidden Splendor, an 80-acre property with an 8.9-acre mine located outside of Helper, Utah. Hidden Splendor, which America West acquired during the mine's 2007 Chapter 11 filing, stopped mining coal last year.
(Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection. Go to http://dbr.dowjones.com)
Write to Stephanie Gleason at [e-mail]
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
May 14, 2013 12:06 ET (16:06 GMT)