Lawyers from Sheffield firm Nabarro have played a key role in preserving the jobs of 2,000 miners and the pensions of 7,000.
A multi-disciplinary team, including city-based corporate partner Ben Hendry, insolvency and restructuring specialist Glen Flannery and pensions expert Ian Greenstreet, advised Doncaster-based UK Coal Operations on its latest restructuring.
The mining business hit problems following a devastating fire at its Daw Mill colliery in February.
The Nabarro team negotiated an innovative arrangement with the Pension Protection Fund which means pension creditors have taken a significant economic interest in the mining group instead of making a claim against an insolvent business.
The deal opened the way for adminstrators David Kelly, Robert Hebenton and Ian Green from accountants PwC to restructure the business to create a new company called UK Coal Production.
Although the Pension Protection Fund will not own UK Coal Production, it will get an economic benefit from the company through substitute debt instruments.
Negotiations are underway which could lead to shares in a new holding company, called UK Coal Mining Holdings, being acquired by an Employee Benefits Trust.
Nabarro’s Glen Flannery said: “UK Coal has been one of Nabarro’s longest standing clients and to secure the future of its viable mining operations is a positive achievement for everyone involved.”
PwC’s David Kelly said: “This deal represents the best outcome for the creditors who would have lost virtually everything if operations had ceased trading.”