CASPER — As coal operator Blackjewel LLC went to battle in bankruptcy court last week, another Powder River Basin company quietly contended with its own financial troubles.

Cloud Peak Energy filed for bankruptcy in May and is one of six coal companies enmeshed in bankruptcy proceedings in Wyoming. The coal operator owns three mines — Antelope and Cordero Rojo in Wyoming and Spring Creek in Montana — and owes $400 million in outstanding debt. Even so, the company reportedly hired a number of workers from the closed Blackjewel mines.

In the latest developments from court, the final day for submitting bids for Cloud Peak Energy’s three thermal coal mines was extended to July 25, according to court documents and confirmed by a spokesman for Cloud Peak Energy. In a process that has become commonplace within Wyoming’s coal country, bankrupt companies unable to repay outstanding debt can have their assets auctioned off to the highest bidder, anointing the mines with new ownership to keep the facilities pumping out coal.

“It is becoming distressingly commonplace for coal companies to declare bankruptcy,” said Clark Williams-Derry, director of energy finance for environmental think tank the Sightline Institute. “King coal has been dethroned, and it is having a hard time competing.”

Cloud Peak employs over 800 workers, accounting for about 20 percent of the workforce in the Powder River Basin, according to the Wyoming Mining Association. The two Wyoming mines produced nearly 36 million tons of coal in 2018 but struggled to keep up with production in a tightening coal market.

Although Cloud Peak’s mines have continued to operate since May, several Campbell County residents have predicted the imminent closure of the facilities.

“That’s more than likely going to close,” former Blackjewel worker Gary Chambers predicted of Cloud Peak’s Cordero Rojo complex last week in the wake of the Blackjewel mine closures.

But the company’s recent hiring practices might suggest otherwise. Cloud Peak hired 60 out-of-work Blackjewel miners who will begin work Tuesday, according to a company statement released Friday on Business Wire.

“When we heard of the sudden layoffs at Blackjewel, we immediately contacted Wyoming Workforce Services to help us match experienced miners with the job openings we have. Given the impact of these layoffs on the Gillette community, we wanted to move as quickly as we could to get people back to work,” Amy Clemetson, senior vice president of human resources at Cloud Peak Energy said in the statement.

Cloud Peak’s financial turbulence had brewed for months before it filed for bankruptcy. Last year, on top of layoffs, the company slashed retirement and health care benefits for its workers. And in March the New York Stock Exchange went so far as to block the company from trading, based on the company’s abysmal financial track record.

What’s more, the company has barreled through a rocky relationship with Campbell County this year, missing several tax payments. The company currently owes about $8.3 million in ad valorem property taxes.

In its latest offensive move, Campbell County filed an objection to the company’s proposed financing motion on July 8.

Cloud Peak sought to rank the tax money it owes Campbell County below other more senior creditors, decreasing the likelihood the company would have to pay out its taxes down the line.

“In a bankruptcy, we talk about a cascade or a waterfall that flows into series of pools,” Williams-Derry said. “Creditors in the upper pool (secured) have to be paid before those in lower pools (unsecured).”

In the financing order Cloud Peak proposed, the county would not be entitled to remaining funds until well after more senior creditors procure their funds.

“It throws the entire Campbell County budget into a state of uncertainty,” Williams-Derry said.

According to the objection submitted to the court, Cloud Peak introduced the new financing order “without the County’s consent and without providing the County with adequate protection as required under the Bankruptcy Code.”

A spokesman for Cloud Peak declined to comment on the recent order.

Cloud Peak Energy is not the only company owing significant money to the county nestled in coal country. According to court documents, Blackjewel LLC owes the county approximately $7 million, according to court documents filed by Blackjewel. At a hearing on Friday, a representative for the county said additional installments may be due as soon as this month.

Enforcement of taxes has been an ongoing issue for Wyoming’s local governments as cash-strapped coal companies miss payments and fall into delinquency.

Campbell County Treasurer Rachael Knust said the morning after the Blackjewel closures that the county attorney’s office will attempt to collect Blackjewel’s unpaid property taxes.

“It goes to the schools, to the hospital, to the cemetery, to the recreation center,” she said. “And then just a portion, some of it goes to the city, some of it goes to the county. That’s just it doesn’t just affect one person; it affects everybody.”

Knust expects that it won’t take long for the effects of the Blackjewel closures to set in.

“We just got done with our fiscal year in June,” she said. “We will start feeling it. Our budgets are in, but I’m positive that everyone will start to look at what we will want to purchase and decide whether it is needed.”

To Shannon Andersen, attorney for the landowners group Powder River Basin Resource Council, transferring ownership or restructuring the finances of a company through bankruptcy will not solve the larger problems looming over the state’s coal economy.

“The bankruptcies are more an indication of a failing industry and the business model just doesn’t work anymore. These mines lose money and are losing their customer base,” she said. “We hope that this is another signal to our political leaders that we cannot ignore; we really need to start having a conversation about the future.”