Blackjewel L.L.C is about to enter its fourth week since filing for Chapter 11 bankruptcy, and the less orderly, Chapter 7 liquidation, option is still on the table. Creditors for the company have now submitted a proposal for more short-term money as they continue negotiating a long-term debtor-in-possesion financing plan.
Blackjewel is asking the court to authorize $2.9 million to secure assets, allow the long-term financing negotiations to continue and avoid converting to a Chapter 7 bankruptcy. In court, the company says it needs financing to pay bills due right away.
The proposed order reads: "Interim relief requested in the Motion is necessary to avoid and irreparable harm the Debtors and their estates"
Creditors have already burned through 60 percent of the $5 million it received July 3 from Riverstone Credit Partners.
"The Debtors are working with the DIP Lenders and several other potential investors to provide additional and long-term financing that, if obtained and approved by this Court, will allow the Debtors to maximize the value of their assets and estates through an orderly sale process," wrote the debtors co-counsels.
The same lawyers are asking the West Virginia bankruptcy court for an emergency hearing to secure financing today at 1:30 EST. It's currently underway.