Walter Energy is the latest firm to give up the ghost in the beleaguered coal patch. The latest victim of rock-bottom coal prices, natural gas competition, and regulations, Walter Energy Inc., filed for chapter 11 bankruptcy protection on Wednesday. Of note, the firm is attempting a fast-track restructuring process that would essentially give ownership of the company to senior creditors.

The firm has been unable to overcome the sharp drop in coal prices and relatively high labor costs, and has presented a plan to swap senior creditors’ debt for ownership of the company in a restructuring that will likely leave junior creditors with little to nothing and significantly cut back on labor and pension expenses.

Walter noted in its statement that it would undertake a sale of its assets through a court-supervised auction if the current restructuring plan was not approved.

Walter Energy

Statement from Walter Energy CEO

“In the face of ongoing depressed conditions in the market for met coal, we must do what is necessary to adapt to the new reality in our industry,” Walter Energy CEO Walt Scheller said in a statement released on Wednesday.

More on Walter Energy bankruptcy

In legal filings related to the bankruptcy, CFO William G. Harvey noted the problems in the coal market and also “crippling legacy labor costs, principally in the form of medical benefits and pension obligations, as well as insupportable hourly labor costs.”

The company noted that it has sufficient cash to guarantee that vendors and suppliers will be paid in full during the reorganization. Court filings show the firm had $270 million in cash on hand as of the end of June. The company’s 22 affiliates all also filed for bankruptcy on Wednesday.

The firm issued a warning in May of this year that it might consider a chapter 11 bankruptcy filing if it couldn’t reach a deal with creditors to restructure its $3 billion debt. The company missed a bond interest payment in June, triggering a 30-day default grace period that was up on Wednesday.

The collapse in coal prices over the last few years has nearly all major coal miners bleeding cash and struggling with debt from earlier acquisitions. Analysts point out that demand for coal in the U.S. has continued to slip given competition from cheap and cleaner-burning natural gas.