Shareholders accuse Cloud Peak of undervaluing assets
GILLETTE — A group of shareholders who represent about 24% of Cloud Peak Energy Corp.’s common stockholders is accusing the company of intentionally undervaluing its assets and striking back-door deals with creditors to manipulate its Chapter 11 bankruptcy process.
“To put it bluntly, shareholders believe there is a high probability of improprieties between certain creditors and the debtor (Cloud Peak) in this case,” says a letter to the bankruptcy court submitted by Massachusetts resident William Crawford on behalf of a group of 99 shareholders. “There is no reasonable way to expect creditors to sufficiently represent shareholder interests.”
The shareholders, who have no seniority claims and their shares are basically worth nothing, allege company officials conspired with major bond holders of Cloud Peak debt to exploit the bankruptcy reorganization process. They want Delaware federal judge Kevin Gross to appoint a committee of equity shareholders to have a seat at the table to look out for their interests.
The letter makes some strong allegations, which was intentional, said Crawford when contacted by the News Record.
“We would gladly use the word ‘colluded,’” he said of what shareholders allege is happening with Cloud Peak Energy and its creditors. “We think it definitely has shown through in their own filings that they have engaged in a very long course of negotiations with the creditors which should’ve been at least filed as material events with the SEC.”
The letter says that through information gleaned from company Securities and Exchange Commission and court filings, Cloud Peak puts its assets at $928.7 million and its liabilities as $635 million. That makes other attempts to “write down” the value of the company suspect, including taking a more than $700 million loss in 2018.
Read more: https://www.laramieboomerang.com/news/shareholders-accuse-cloud-peak-of-undervaluing-assets/article_dc9f3e28-5b56-5e33-89b1-546465a0084f.html
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