The company filed for bankruptcy hours before the deadline expired. Cloud Peak was also struggling to cover tax payments, including a production tax bill of US$8.3 million.
Cloud Peak gained notoriety for maintaining operations after the major coal industry plunge in 2015-2016 that resulted in many major coal producers taking huge losses.
CEO Colin Marshall has proposed the strategy of selling the company's assets, which he believes "will provide the best opportunity to maximize value for Cloud Peak Energy." At the end of last year, the company filed nearly US$929 million in assets and around US$635 million in total debts.
Though speculation surrounds whether or not Cloud Peak will sell its mines, the company released a statement that said it will continue operations in the three massive coal mines located in Wyoming and Montana as they consider options for restructuring.
Much of the speculation is negative, especially concerning the company's Wyoming mines. Mine sales in the state have often fallen through due to issues with bonding, the insurance that covers the cost of clean-up after mining operations.
Summer 2019 is projecting a fall in coal-fired electricity, despite the season typically resulting in a boom for coal plants in order to power the increased demand for air conditioning. The decline is attributed to the rise of cheap natural gas and renewable, clean energy sources.
The Powder River Resource Council received calls from a Wyoming landowner's group who voiced concerns "that employees' and retirees' pensions and healthcare benefits will be taken away, and that millions of dollars of ad valorem taxes owed to Wyoming countries for coal already produced will be left unpaid."