DALLAS, Dec. 30, 2016 /PRNewswire/ -- As previously announced, Southwest Bank, the trustee of the Dominion Resources Black Warrior Trust (the "Trust"), was informed by Walter Energy, Inc., the parent of Walter Black Warrior Basin LLC (the "Company"), that it, together with certain of its subsidiaries and affiliates, including the Company ("Debtors") filed a petition for relief under Chapter 11 of the U.S. Bankruptcy Code (the "Bankruptcy Code") with the United States District Court for the Northern District of Alabama Southern Division (the "Bankruptcy Court") on July 15, 2015 and that it had an agreement with lenders regarding a pre-negotiated restructuring plan. There have been several rulings related to the bankruptcy proceedings as disclosed by the Trust in Current Reports on Form 8-K filed with the Securities and Exchange Commission (the "SEC") on each of August 19, 2015, September 16, 2015, November 20, 2015 and December 31, 2015. The Trust has been involved in various appeals of rulings by the Bankruptcy Court regarding the Debtors' bankruptcy filings; however, the Trust was unsuccessful in obtaining a favorable ruling on any of its appeals and does not intend to pursue further appeals.
Pursuant to Section 9.02(b) of the Trust Agreement of the Trust (the "Trust Agreement"), the Trust shall terminate on its terms as a result of the failure to maintain a 1.2 to 1.0 ratio for two consecutive calendar quarters of (i) cash received pursuant to the Royalty Interests of the Trust (as defined hereafter) to (ii) administrative costs. The "Royalty Interests" are certain overriding royalty interests in the proved natural gas properties located in the Pottsville coal formation of the Black Warrior Basin, Tuscaloosa County, Alabama. As a result of the nonpayment of distributions to the Trust by Walter Energy, Inc., the Trust did not maintain a 1.2 to 1.0 ratio for two consecutive calendar quarters. Therefore, pursuant to Section 9.02(b) of the Trust Agreement, the Trust must terminate.
Pursuant to the termination procedures set forth in the Trust Agreement, the Trust's termination process shall be complete as of December 30, 2016 (as December 31, 2016 is not a business day). As the assets of the Trust do not exceed the liabilities of the Trust, the Trust is unable to make a distribution to the unitholders of the Trust. Unitholders may access financial information and tax information of the Trust from its website, www.dom-dominion.com.
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SOURCE Southwest Bank