Cloud Peak pays Campbell Co. for property taxes


By Greg Johnson

Gillette News Record

Via Wyoming News Exchange

 

GILLETTE – A day before a Friday deadline to make a $1.8 million interest payment on its debt, and amid widespread speculation Cloud Peak Energy Corp. will file for Chapter 11 bankruptcy protection, the Gillette-based coal miner has paid more than $600,000 owed Campbell County for its 2018 property taxes.

The company took a check for $617,466.86 to the county Thursday morning, but still had $8.3 million in ad valorem taxes on coal produced in 2018 due by the end of the day Friday, said Campbell County Commissioner Mark Christensen.

While he’s hopeful Cloud Peak will pay its taxes on time, he’s skeptical that will happen, especially with a bankruptcy possibly in the works.

“They haven’t said anything about not paying,” Christensen said. “My hope is that they will do it. My gut feeling is probably not, because it doesn’t make sense to me that you’d pay the taxes on the land and not pay the coal taxes at the same time.”

He said paying the property tax is a strategic move that means if it comes to the county having to recover money owed that it will have to go after other assets and not the land.

By the end of business Friday, a lot of questions about Cloud Peak’s future are likely to be answered, he said.

“(Friday) will be a busy day for Cloud Peak Energy,” Christensen said. “It’s absolutely huge. A lot of stuff is going to line up tomorrow.”

Should Cloud Peak file for Chapter 11 reorganization, it will follow three other large Powder River Basin coal producers that filed during the coal downturn that began about four years ago.

Peabody Energy, Arch Coal Inc. and Alpha Natural Resources all went through Chapter 11, with Peabody and Arch emerging stronger and continuing to make money from their PRB mines.

Alpha sold its local mines, Eagle Butte and Belle Ayr, and in the process left the county short millions in unpaid ad valorem taxes. Campbell County eventually hired an outside law firm to go after Arch for the taxes and settled last year for $8.67 million owed for 2015 taxes and all but about $4 million of what was owed for 2016.

Christensen said that, if pushed, the county again would pursue taxes owed by Cloud Peak, but he anticipates that it won’t get to that point.

Even in bankruptcy, he said the company can go to the court and make sure the taxes are paid. That’s what happened with Peabody and Arch, which both kept up on their ad valorem taxes during their bankruptcy reorganizations, Christensen said.

“I sure hope that Cloud Peak takes the high road like Arch and Peabody did,” he said. “In fact, Arch went to the court and asked to pay their taxes early. … As for Cloud Peak, I don’t see any reason why they wouldn’t (do the same). They’ve always been good to us and you can argue we’ve been good to them.”

Even more concerning for Christensen than the taxes owed by Cloud Peak Energy are the more than 900 workers the company employs at its two Campbell County mines, Antelope and Cordero Rojo.

Anything that potentially puts some or all of those workers out of jobs would “be absolutely devastating” to the county and northeastern Wyoming.

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