AENYQ Disclosure Statement /POR

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IN THE UNITED STATES BANKRUPTCY COURT FOR THE EASTERN DISTRICT OF TENNESSEE NORTHERN DIVISION KNOXVILLE IN RE: AMERICAS ENERGY COMPANY, Debtor.
CASE NO. 11-35466 11-35468 (Chapter 11)
DISCLOSURE STATEMENT PROPOSED BY DEBTOR
JAMES R. MOORE MOORE & BROOKS 6207 HIGHLAND PLACE WAY, STE. 203 KNOXVILLE, TENNESSEE 37919 ATTORNEY FOR DEBTOR DATED: JANUARY 18, 2012
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TABLE OF CONTENTS SUMMARY OF THE PLAN AND DISTRIBUTION TO CREDITORS.. . . . . . . . . . . . . . . . . . . i I. INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 A. B. C. D. II. Filing of the Debtors Chapter 11 Case. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Purpose of Disclosure Statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Hearing on Confirmation of the Plan of Reorganization. . . . . . . . . . . . . . . . . . . . . 2 Sources of Information.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
EXPLANATION OF CHAPTER 11. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 A. B. Overview of Chapter 11.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Plan of Reorganization.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
III.
VOTING PROCEDURES AND CONFIRMATION REQUIREMENTS. . . . . . . . . . . . . 5 A. B. C. D. E. F. G. Ballots and Voting Deadline. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Claimants Entitled to Vote.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Bar Date for Filing Proofs of Claim.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Definition of Impairment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Classes Impaired Under the Plan of Reorganization. . . . . . . . . . . . . . . . . . . . . . . . 7 Vote Required for Class Acceptance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Information on Voting and Ballots. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 1. 2. H. Transmission of Ballots to Creditors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Ballot Tabulation Procedures.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Confirmation of Plan of Reorganization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 1. 2. Solicitation of Acceptances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Requirements for Confirmation of the Plan of Reorganization. . . . . . . . . . 9
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3. 4. IV.
Acceptances Necessary to Confirm the Plan of Reorganization. . . . . . . . 10 Cramdown. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
BACKGROUND OF THE DEBTOR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 A. B. C. D. Nature of the Debtors Occupation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Legal Structure and Ownership. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Assets and Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Selected Operational and Financial Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 1. 2. 3. 4. 5. E. Historical Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Liquidation Analysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Summary of All Classes And Their Treatment. . . . . . . . . . . . . . . . . . . . . 13 Projected Income and Budget. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Representations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 1. 2. 3. Pre-Filing Proceedings.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Post-Petition Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Preference and Other Avoidance Litigation.. . . . . . . . . . . . . . . . . . . . . . . 14
V.
EVENTS LEADING TO THE FILING OF THE PETITION FOR RELIEF. . . . . . . . . . 14 Reason for Filing Chapter 11. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
VI.
POST-PETITION OPERATIONS AND SIGNIFICANT EVENTS. . . . . . . . . . . . . . . . . 14 A. B. Post-Petition Operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Significant Orders Entered During the Case. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 1. 2. Initial Activity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 The Official Unsecured Creditors Committee. . . . . . . . . . . . . . . . . . . . . . 15
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3. 4. 5. VII.
Adequate Protection Issues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Employee Actions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Applications to Retain Professionals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
DESCRIPTION OF THE PLAN OR REORGANIZATION.. . . . . . . . . . . . . . . . . . . . . . 16 A. B. C. D. Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Designation of Claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Estimated Size of Allowed Claims in Classes. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Treatment of Claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 1. Treatment of Unclassified Claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 (a) (b) (c) (d) 2. Administrative Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Fee Claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Allowance of Administrative Expenses.. . . . . . . . . . . . . . . . . . . . 19 Post Petition Priority Tax Claims. . . . . . . . . . . . . . . . . . . . . . . . . 19
Classification and Treatment of Claims.. . . . . . . . . . . . . . . . . . . . . . . . . . 20 (a) (b) (c) (d) (f) (g) (h) (i) (j) General.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Class 1 Secured Claims Held by Barbara Evans.. . . . . . . . . . . . 20 Class 2 Secured Claim Held by CCMT. . . . . . . . . . . . . . . . . . . 21 Class 3 Secured Claim Held by John Gargis. . . . . . . . . . . . . . . 21 Class 4 Chester Franklin. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Class 5 Priority Unsecured Wages Claims. . . . . . . . . . . . . . . . . 22 Class 6 Priority Unsecured Claim Held by IRS. . . . . . . . . . . . . 22 Class 7 Priority Unsecured Claims for Taxes. . . . . . . . . . . . . . . 22 Class 8 Priority Unsecured Claims Held by State Agencies.. . . 23
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(k) (l) (m) E.
Class 9 General Unsecured Claims.. . . . . . . . . . . . . . . . . . . . . . 23 Class 10 General Unsecured Claim Held in Litigation Class. . . 23 Class 11 Shareholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Means of Implementation of the Plan of Reorganization. . . . . . . . . . . . . . . . . . . 24 1. 2. 3. Powers and Duties of a Debtor-in-Possession. . . . . . . . . . . . . . . . . . . . . . 24 Distributable Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Retention of Professionals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
F. G. H. I. J. K L. M. N. O. VIII.
Provisions Governing Distribution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Contested and Contingent Claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Executory Contracts and Leases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Maintenance of Causes of Action. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Discharge. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Retention of Jurisdiction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Amendments of the Plan of Reorganization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Termination of Trustee and Committees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Management and Operation of Debtor.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Insiders and Directors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
FEASIBILITY AND RISKS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 A. B. Feasibility of Confirmation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Risks Associated with the Plan of Reorganization. . . . . . . . . . . . . . . . . . . . . . . . 27
IX.
ALTERNATIVES TO PLAN OF REORGANIZATION AND LIQUIDATION ANALYSIS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 A. Dismissal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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B. C. X. XI. XII. XIII.
Chapter 7 Liquidation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Alternative Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECURITIES CONSIDERATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 DESCRIPTION OF COMMON STOCK. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 OFFICERS AND DIRECTORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 APPENDIX OF EXHIBITS
Exhibit A Income and Expenses 2010 and 2011 Exhibit B Projected Income and Budget Through December 2013 Exhibit C Summary of Treatment for All Classes Exhibit D Liquidation Analyses for the Debtor Exhibit E Plan of Reorganization
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SUMMARY OF THE PLAN AND DISTRIBUTION TO CREDITORS The Bankruptcy Code (Bankruptcy Reform Act of 1978, Pub.L.No. 95-598, 92 Stat. 2633 (1978) (codified at 11 U.S.C. 1101-1174 (Supp. III 1979)) and as may have been amended) dictates the priorities of payment that may be made to creditors under a chapter 11 plan of reorganization. At the top of the hierarchy are creditors with a security interest and liens on assets of a debtor, the secured creditors. A secured creditor is entitled to be paid the full amount of its claim pursuant to the terms of the plan of reorganization, so long as the collateral has sufficient value to pay the claim. If the collateral is not worth the full amount of the claim, the secured creditor is entitled to be paid part of its claim up to the value of the collateral with the balance being classed as an unsecured claim. If there are no superpriority claims, then creditors who provide credit to the chapter 11 debtors are the next group of creditors who share in the distributions from the plan. In most instances, these Administrative Expenses are paid because the secured creditor permits and consents to certain amounts being made available from their collateral. Only upon these claims being paid in full are other creditors, including unsecured creditors, defined in this plan as Priority Unsecured Claims or General Unsecured Claims, entitled to share in any distributions under a plan. In this case Americas Energy Company (the Debtor) has pledged the building it uses for its corporate offices to one secured creditor, several coal leases and most of its coal mining equipment to the individuals from whom it bought Evans Coal Corp, its wholly owned subsidiary, and two other pieces of coal mining equipment to another secured lender. It has pledged one coal lease to an insider for loans made by the insider to the Debtor. Various state regulatory agencies have assessed fines for various coal mining infractions. There is one substantial unsecured claim for a line of credit that was intended to have been secured by all of the assets of the Debtor and/or Evans Coal Corp., but further analysis indicates that the purported secured claim may in fact end up being an unsecured claim. There are a number of other unsecured claims by various providers of goods and/or services related to its primary business as a coal mining company. The plan proposes, starting on the Effective Date and at other points later on, for the Debtor to liquidate all of the assets in an orderly manner to maximize the values of the assets held by its wholly owned subsidiary, pay all secured claims asserted against those assets, and to pay all unsecured claims over a period of up to seven years until all claims are paid in full.
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Frequently Asked Questions: Who Is the Debtor? Americas Energy Company (the Debtor). Americas Energy Company is a Nevada corporation in good standing. How Long Has the Debtor Been in Chapter 11? On December 7, 2011 Debtor filed its petition for relief under chapter 11 of the Unites States Bankruptcy Code. Has a Trustee Been Appointed in This Chapter 11 Case? Yes. Pursuant to a motion requesting the appointment of a chapter 11 trustee, the court signed an order on December 22, 2011 appointing a chapter 11 trustee. The Debtor would report, though, that it is its opinion that the Courts order was issued improperly and has filed a notice of appeal to reverse that order. What Is the Debtor Attempting to Do in Chapter 11? Chapter 11 is the principal reorganization chapter of the Bankruptcy Code. The Plan of Reorganization is the legal document which sets forth the means by which holders of claims against the Debtor will be treated. The Debtor is the entity(party) who will be the source of all funds to pay all claims. Has the Debtor Proposed a Plan of Reorganization? Yes. Attached to this Disclosure Statement as an exhibit is a copy of the Plan of Reorganization proposed by the Debtor. If the Plan of Reorganization Is the Document Which Governs How a Claim Will Be Treated, Why Am I Receiving This Disclosure Statement? In order to confirm a plan of reorganization, the Bankruptcy Code requires that a debtor solicit acceptances of a proposed plan of reorganization. But before a debtor can solicit such acceptances, the Court must approve the information to be sent to the creditors, along with the plan of reorganization, disclosing information to allow you to make an informed judgment about the plan of reorganization. The purpose of this Disclosure Statement is to provide that information required by the Bankruptcy Code. Has This Disclosure Statement Been Approved by the Bankruptcy Court? In practice, the Bankruptcy Court requires that a proposed disclosure statement be distributed to all parties in interest who request copies to solicit objections and input in anticipation of the Bankruptcy Courts final review and approval. This Disclosure Statement is considered approved only after the Court is satisfied that it contains information of a kind, and in sufficient detail, adequate to enable a hypothetical, reasonable investor typical of each class of creditors whose acceptance is being solicited to make an informed judgment whether to vote to accept or reject the Plan and only when it is accompanied with an Order Approving Disclosure Statement. THIS DISCLOSURE STATEMENT, TOGETHER WITH THE PLAN WHICH IS ATTACHED HERETO, SHOULD BE READ IN ITS ENTIRETY. FOR THE CONVENIENCE OF CREDITORS, THE TERMS OF THE PLAN ARE SUMMARIZED IN THIS DISCLOSURE STATEMENT, BUT ALL SUMMARIES ARE QUALIFIED IN THEIR ENTIRETY BY THE PLAN -ii-
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ITSELF, WHICH IS CONTROLLING IN THE EVENT OF ANY INCONSISTENCY. How Do I Determine Which Class I Am In? To determine the class of your claim or interest, you determine the nature of the claim against the debtor (i.e., unsecured, secured); then, turn to the Table of Contents, which will direct you to the discussion of the Plan and to the treatment provided to the class in which you are grouped. The pertinent section of the Disclosure Statement dealing with that class will explain, among other things, who is in that class, what is the size of the class, and what you will receive if the Plan is confirmed, and when you will receive what the Plan has provided for you if the Plan is confirmed. Paragraph VII B lists all classes of claimants and their types of claims. Why Is Confirmation of a Plan of Reorganization Important? Confirmation of a plan of reorganization is necessary for a debtor in a chapter 11 case to provide the court-approved treatment to its creditors under the plan. Unless the Plan of Reorganization is confirmed, the debtor is legally prohibited from providing you what it has proposed in its Plan of Reorganization. What Is It Necessary to Confirm a Plan of Reorganization? Confirmation of a plan requires, among other things, the vote in favor of a plan of two-thirds in total dollar amount and a majority in number of claims actually voting in each voting class. (If the vote is insufficient, the Court can still confirm a plan, but only upon being provided additional proof regarding the ultimate fairness of the plan to the creditors.) Am I Entitled to Vote on the Plan? Any creditor of the Debtor whose claim is IMPAIRED under this Plan is entitled to vote, if either (i) your claim has been scheduled by the Debtor and such claim is not scheduled as disputed, contingent, or unliquidated, or (ii) you have filed a proof of claim on or before the last date set by the Bankruptcy Court for such filings. Any claim as to which an objection has been filed (and such objection is still pending) is not entitled to vote, unless the Bankruptcy Court temporarily allows the creditor to vote upon motion by you or your counsel. Such motion must be heard and determined by the Bankruptcy Court prior to the date established by the Court to confirm this Plan. How Do I Determine Whether I Am in an Impaired Class? The Plan in the Article identifying Claims Impaired and Not Impaired by the Plan and the Disclosure Statement in Section VII. D. 2 identifies the classes of creditors whose claims are impaired. In the event you have a question regarding whether you are in an impaired class, you should assume your claim is impaired and vote. If your claim is impaired, your vote will be considered by the Court. When Is the Deadline by Which I Need to Return My Ballot? The Bankruptcy Court has directed that, in order to be counted for voting purposes, ballots for the acceptance or rejection of the Plan must be received by the Debtor no later than the date indicated in the Order Approving Disclosure Statement. Ballots should be mailed to the following address:
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James R. Moore Moore & Brooks 6207 Highland Place Way, Suite 203 Knoxville, Tennessee 37919 How Do I Determine When and How Much I Will Be Paid? In the Plan Overview, the Debtor has provided both written and financial summaries of what each class of creditors will receive under the Plan, cramdown of Plan and the liquidation of the Debtor in a chapter 7. The written summaries provide a short summary of what each class will receive. PLEASE REMEMBER THE DESCRIPTION OF THE PLAN IN THE SUMMARY IS A BRIEF SUMMARY ONLY AND CREDITORS AND OTHER PARTIES IN INTEREST ARE URGED TO REVIEW THE PAGES OF THE DISCLOSURE STATEMENT REFERENCED IN THE WRITTEN SUMMARY AND THE PLAN ATTACHED AS AN EXHIBIT TO THIS DISCLOSURE STATEMENT. Why Does the Debtor Support the Plan of Reorganization? If converted to a chapter 7 liquidation, only the secured creditors would receive anything. The rest of the creditors holding priority and general unsecured claims would likely receive nothing. The Debtor urges you to study the Plan of Reorganization and the Disclosure Statement. We recommend that all classes VOTE in FAVOR of the Plan.
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I. INTRODUCTION Americas Energy Company (hereinafter Debtor or AENY), the Debtor in this chapter 11 case, submits this Disclosure Statement pursuant to Bankruptcy Code section 1125 for use in the solicitation of votes on the Plan. This Disclosure Statement sets forth certain relevant information regarding the Debtors prepetition financial history, the need to seek chapter 11 protection, significant events that have occurred during the chapter 11 case, and the anticipated procedures for functioning as the postconfirmation Debtor. This Disclosure Statement also describes terms and provisions of the Plan, including certain alternatives, certain effects of confirmation, certain risk factors, and the manner in which distributions will be made. Additionally, this Disclosure Statement discusses the confirmation process and the voting procedures that holders of Claims must follow for their votes to be counted. A. Filing of the Debtors Chapter 11 Case
The Debtor filed its voluntary petition for relief under chapter 11 of the Bankruptcy Code (Bankruptcy Reform Act of 1978, Pub.L.No. 95-598, 92 Stat. 2633 (1978) (codified at 11 U.S.C. 1101-1174 (Supp. III 1979)) on December 7, 2011 (the Petition Date), in the United States Bankruptcy Court for the Eastern District of Tennessee, Northern Division Knoxville (the Bankruptcy Court). Since the petition for relief was filed, AENY has continued to operate as the owner of a series of coal mines located in Kentucky that it owns through its wholly owned subsidiary, Evans Coal Corp. B. Purpose of Disclosure Statement
This Disclosure Statement is submitted in accordance with Bankruptcy Code section 1125 for the purpose of soliciting acceptances of the Plan from holders of certain Classes of Claims. The only Claimants whose acceptances of the Plan are sought are those whose Claims are impaired (as that term is defined in Bankruptcy Code section 1124) by the Plan and who are receiving distributions under the Plan. Holders of Claims that are not receiving or retaining any property under the Plan are deemed to have rejected the Plan. The Debtor has prepared this Disclosure Statement pursuant to Bankruptcy Code section 1125, which requires that a copy of a plan, or a summary thereof, be submitted to all holders of Claims against the Debtor, along with a written disclosure statement containing adequate information about the Debtor of a kind, and in sufficient detail, as far as is reasonably practicable, that would enable a hypothetical, reasonable investor typical of Claimants to make an informed judgment in exercising their right to vote on a plan. A copy of the Plan is included with the materials sent along with this Disclosure Statement.
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This Disclosure Statement ultimately must be approved by the Bankruptcy Court, which approval is indicated only if this Disclosure Statement is accompanied by an Order Approving Disclosure Statement. Such approval is required by the Bankruptcy Code, and does not constitute a judgment by the Bankruptcy Court as to the desirability of the Plan or as to the value or suitability of any consideration offered thereunder. Such approval, which would be indicated only if this Disclosure Statement is accompanied by an Order Approving Disclosure Statement, does indicate, however, that the Bankruptcy Court has determined that the Disclosure Statement meets the legal requirements of Bankruptcy Code section 1125 and contains adequate information to permit the Claimants whose acceptance of the Plan is solicited, to make an informed judgment regarding acceptance or rejection of the Plan. THE APPROVAL BY THE BANKRUPTCY COURT OF THIS DISCLOSURE STATEMENT DOES NOT CONSTITUTE AN ENDORSEMENT BY THE BANKRUPTCY COURT OF THE PLAN OR A GUARANTEE OF THE ACCURACY OR COMPLETENESS OF THE INFORMATION CONTAINED HEREIN. THE MATERIAL CONTAINED HEREIN IS INTENDED SOLELY FOR THE USE OF CREDITORS OF THE DEBTOR IN EVALUATING THE PLAN AND VOTING TO ACCEPT OR REJECT THE PLAN AND, ACCORDINGLY, MAY NOT BE RELIED ON FOR ANY PURPOSE OTHER THAN THE DETERMINATION OF HOW TO VOTE ON, OR WHETHER TO OBJECT TO, THE PLAN. THE DEBTORS REORGANIZATION PURSUANT TO THE PLAN IS SUBJECT TO NUMEROUS CONDITIONS AND VARIABLES, AND THERE CAN BE NO ABSOLUTE ASSURANCE THAT THE PLAN, AS CONTEMPLATED, WILL BE EFFECTUATED. THE DEBTOR BELIEVES THAT THE PLAN, AND THE TREATMENT OF CLAIMS THEREUNDER, IS IN THE BEST INTERESTS OF CLAIMANTS, AND URGES THAT YOU VOTE TO ACCEPT THE PLAN. THERE HAS BEEN NO INDEPENDENT AUDIT OF THE FINANCIAL INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT. THE DEBTOR IS NOT ABLE TO WARRANT OR REPRESENT THAT THE INFORMATION CONTAINED HEREIN IS WITHOUT ANY INACCURACY. C. Hearing on Confirmation of the Plan
The Bankruptcy Court sets the hearing (the Confirmation Hearing) in its Order Approving Disclosure Statement to determine whether the Plan has been accepted by the requisite number of Claimants and whether the other requirements for confirmation of the Plan have been satisfied. Only after the Court has approved the Disclosure Statement as having adequate information will holders of Claims against the Debtor have a right to vote on the Plan. Ballots must be delivered by the date indicated in the Order Approving Disclosure Statement to Jim Moore, Moore & Brooks, 6207 Highland Place Way, Suite 203, Knoxville, Tennessee 37919. If the Plan is rejected by one or more Page 2 of 36
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impaired Classes of Claims, the Bankruptcy Court may still confirm the Plan, or a modification thereof under Bankruptcy Code section 1129(b) (commonly referred to as a cramdown) if it determines, among other things, that the Plan does not discriminate unfairly and is fair and equitable with respect to the rejecting Class or Classes of Claims impaired under the Plan. The procedures and requirements for voting on the Plan are described in more detail below. D. Sources of Information
Except as otherwise expressly indicated, the portions of this Disclosure Statement describing the Debtor, its business operations, properties and management and the Plan have been prepared from information furnished by the Debtor. Certain of the materials contained in this Disclosure Statement are taken directly from other readily accessible documents or are digests of other documents. While the Debtor has made every effort to retain the meaning of such other documents or portions that have been summarized, it urges that any reliance on the contents of such other documents should depend on a thorough review of the documents themselves. In the event of a discrepancy between this Disclosure Statement and the actual terms of a document, the actual terms of such document shall govern and apply. The statements contained in this Disclosure Statement are made as of the date hereof unless another time is specified, and neither the delivery of this Disclosure Statement nor any exchange of rights made in connection with it shall, under any circumstances, create an implication that there has been no change in the facts set forth herein since the date of this Disclosure Statement. No statements concerning the Debtor, the value of its properties, or the value of any benefit offered to the holder of a Claim in connection with the Plan should be relied on other than as set forth in this Disclosure Statement. In arriving at a decision, parties should not rely on any representation or inducement made to secure their acceptance or rejection that is contrary to information contained in this Disclosure Statement, and any such additional representations or inducements should be immediately reported to counsel for the Debtor, Jim Moore, Moore & Brooks, 6207 Highland Place Way, Suite 203, Knoxville, Tennessee 37919 (Telephone: 865- 4505455). II. EXPLANATION OF CHAPTER 11 A. Overview of Chapter 11
Chapter 11 is the principal reorganization chapter of the Bankruptcy Code. Under chapter 11, debtors-in-possession attempt to reorganize ones business and financial affairs for the benefit of the debtors, the creditors, and other interested parties.
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The commencement of a chapter 11 case creates an estate comprising all of the debtors legal and equitable interests in property as of the date the petition is filed. Unless the Bankruptcy Court orders the appointment of a trustee, Bankruptcy Code sections 1101, 1107 and 1108 provide that a chapter 11 debtor may continue it business operation and control the assets of its estate as debtorin-possession. In this case, the Court has appointed a chapter 11 trustee, which the Debtor has appealed. The filing of a chapter 11 petition also triggers the automatic stay under Bankruptcy Code section 362. The automatic stay halts essentially all attempts to collect pre-petition claims from the Debtor or to otherwise interfere with the Debtors occupation or its estate. Formulation of a plan of reorganization is the principal purpose of a chapter 11 case. A plan of reorganization sets forth the means for satisfying the claims of creditors against the debtor. Unless a trustee is appointed, only the debtor may file a plan during the first 120 days of a chapter 11 case (the Exclusive Period), or any extension of said Exclusive Period approved by the Court. After the Exclusive Period has expired, a creditor or any other interested party may file a plan, unless the debtor files a plan within the Exclusive Period. If the debtor files a plan within the Exclusive Period, the debtor is given sixty (60) additional days (the Solicitation Period) to solicit acceptances of the plan. Bankruptcy Code section 1121(d) permits the Bankruptcy Court to extend or reduce the Exclusive Period and the Solicitation Period upon a showing of adequate cause. In this case, since the Court has approved the appointment of a trustee, the exclusivity period has been terminated which will permit any party to file a plan of reorganization. B. Plan of Reorganization
After the plan has been filed, the holders of claims against the debtor are permitted to vote on whether to accept or reject the plan. Chapter 11 does not require that each holder of a claim against the debtor vote in favor of a plan in order for the plan to be confirmed. At a minimum, however, a plan must be accepted by a majority in number and two- thirds in amount of those claims actually voting from at least one class of claims impaired under the plan. Classes of claims that are not impaired under a plan of reorganization are conclusively presumed to have accepted the plan, and therefore are not entitled to vote. A class is impaired if the plan modifies the legal, equitable, or contractual rights attaching to the claims of that class. Modification for purposes of impairment does not include curing defaults and reinstating maturity or payment in full in cash. Classes of claims that receive or retain no property under a plan of reorganization are conclusively presumed to have rejected the plan, and therefore are not entitled to vote. Even if all classes of claims accept a plan of reorganization or liquidation, the Bankruptcy Court may nonetheless still deny confirmation. Bankruptcy Code section 1129 sets forth the requirements for confirmation and, among other things, requires that a plan be in the best interests of impaired and dissenting creditors and that the plan be feasible. The best interests test generally Page 4 of 36
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requires that the value of the consideration to be distributed to impaired and dissenting creditors under a plan may not be less than those parties would receive if the debtor were liquidated under a hypothetical liquidation occurring under chapter 7 of the Bankruptcy Code. The Bankruptcy Court may confirm a plan of reorganization or liquidation even though fewer than all of the classes of impaired claims accept it. The Court may do so under the cramdown provisions of Bankruptcy Code section 1129(b). In order for a plan to be confirmed under the cramdown provisions, despite the rejection of a class of impaired claims, the proponent of the plan must show, among other things, that the plan does not discriminate unfairly and that it is fair and equitable with respect to each impaired class of claims that has not accepted the plan. The Bankruptcy Court must further find that the economic terms of the particular plan meet the specific requirements of Bankruptcy Code section 1129(b) with respect to the subject, objecting class. If the proponent of the plan proposes to seek confirmation of the plan under the provisions of Bankruptcy Code section 1129(b), the proponent must also meet all applicable requirements of Bankruptcy Code section 1129(a) (except section 1129(a)(8)). Those requirements include the requirements that (i) the plan comply with applicable Bankruptcy Code provisions and other applicable law, (ii) that the plan be proposed in good faith, and (iii) that at least one impaired class of creditors has voted to accept the plan. III. VOTING PROCEDURES AND CONFIRMATION REQUIREMENTS A. Ballots and Voting Deadline
A ballot for voting to accept or reject the plan is enclosed with a disclosure statement only after the disclosure statement has been approved by the Court, and has been mailed to Claimants (or their authorized representative) entitled to vote. After carefully reviewing this Disclosure Statement, including all exhibits, each Claimant (or its authorized representative) entitled to vote should indicate its vote on the ballot that has been or will be provided. All Claimants (or their authorized representative) entitled to vote must (i) carefully review the ballot and instructions thereon, (ii) execute the ballot, and (iii) return it to the address indicated on the ballot by the deadline (the Voting Deadline) for the ballot to be considered. The Bankruptcy Court has directed that, in order to be counted for voting purposes, ballots for the acceptance or rejection of the Plan must be received no later than the date indicated on the Order Approving Disclosure Statement, at the following address: Jim Moore Moore & Brooks 6207 Highland Place Way, Suite 203 Knoxville, Tennessee 37919 Page 5 of 36
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BALLOTS MUST BE RECEIVED AT THE ABOVE ADDRESS NO LATER THAN THE DATE INDICATED ON THE ORDER APPROVING DISCLOSURE STATEMENT. ANY BALLOTS RECEIVED AFTER THAT DEADLINE WILL NOT BE COUNTED. B. Claimants Entitled to Vote
Any Claimant of the Debtor whose Claim is impaired under the Plan is entitled to vote if either (i) the Debtor has scheduled the Claimants Claim (and such Claim is not scheduled as disputed, contingent, or unliquidated) or (ii) the Claimant has filed a proof of claim on or before the deadline set by the Bankruptcy Court for such filings. Any holder of a Claim as to which an objection has been filed (and such objection is still pending) is not entitled to vote, unless the Bankruptcy Court (on motion by a party whose Claim is subject to an objection), temporarily allows the Claim in an amount that it deems proper for the purpose of accepting or rejecting the Plan. Such motion must be heard and determined by the Bankruptcy Court before the first date set by the Bankruptcy Court for the Confirmation Hearing of the Plan. In addition, a Claimants vote may be disregarded if the Bankruptcy Court determines that the Claimants acceptance or rejection was not solicited or procured in good faith or in accordance with the applicable provisions of the Bankruptcy Code. All claims identified by Debtor at the time of filing its chapter 11 petition for relief have been listed in Debtors Schedules. As stated in Section III E, below, all classes 1 through 10, which Debtor intends to include all claim holders, are entitled to vote under the plan as proposed by Debtor. A list of all claim holders known to Debtor is attached hereto as Exhibit E and is incorporated hereto for all purposes. C. Bar Date for Filing Proofs of Claim
The Bankruptcy Court established April 3, 2012 as the last day for filing proofs of claim in this chapter 11 case. Further, the deadline for filing administrative claims is thirty days after the Effective Date, as is noted in Section VII D 1. a. below. Finally, any objections to claims must be filed no later than thirty days after the Effective Date of the Plan. D. Definition of Impairment
Under Bankruptcy Code section 1124, a class of Claims is impaired under a plan of reorganization unless, with respect to each Claim of such class, the plan: 1. leaves unaltered the legal, equitable, and contractual rights of the holder of such Claim; notwithstanding any contractual provision or applicable law that entitles the holder of a Claim to receive accelerated payment of his Claim after the occurrence of a default; Page 6 of 36
2.
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3.
cures any such default that occurred before or after the commencement of the case under the Bankruptcy Code, other than a default of a kind specified in Bankruptcy Code section 365(b)(2); reinstates the maturity of such Claim as it existed before the default; compensates the holder of such Claim for damages incurred as a result of reasonable reliance on such contractual provision or applicable law; and does not otherwise alter the legal, equitable, or contractual rights to which such Claim entitles the holder of such Claim.
4. 5.
6.
E.
Classes Impaired Under the Plan
All Classes are impaired under the Plan. Therefore, all holders of those Claims in Classes 1 through 9 are subject to the limitations set forth above and are eligible to vote to accept or reject the Plan. F. Vote Required for Class Acceptance
The Bankruptcy Code defines acceptance of a plan by a class of creditors as acceptance by holders of at least two-thirds in dollar amount and more than one-half in number of the claims of that class that actually cast ballots for acceptance or rejection of the plan; that is, acceptance takes place only if creditors holding claims at least two-thirds in amount of the total amount of claims and more than one-half in number of the creditors actually voting cast their ballots in favor of acceptance. G. Information on Voting and Ballots 1. Transmission of Ballots to Creditors
Except as otherwise provided in the Order (I) Approving Disclosure Statement Proposed by Debtor; (II) Establishing Time For Filing Acceptances or Rejections of Plan; and (III) Establishing Objection Deadlines, entered on by the Court, ballots are ordinarily forwarded to all Claimants. Under Bankruptcy Code section 1126(g), Claimants who do not either receive or retain any property under the plan are deemed to have rejected the plan. In the event a Claimant does not vote, the Bankruptcy Court may deem such Claimant to have accepted the plan. 2. Ballot Tabulation Procedures
For purposes of voting on the plan, the amount and classification of a Claim and the procedures that will be used to tabulate acceptances and rejections of the plan shall be exclusively as follows:
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(a)
If no proof of claim has been timely filed, the voted amount of a Claim shall be equal to the amount listed for the particular Claim in the Schedules of Assets and Liabilities, as and if amended, to the extent such Claim is not listed as contingent, unliquidated, or disputed, and the Claim shall be placed in the appropriate Class, based on the Debtors records, and consistent with the Schedules of Assets and Liabilities and the Claims registry of the Clerk of the Bankruptcy Court (the Clerk); If a proof of claim has been timely filed, and has not been objected to before the expiration of the Voting Deadline, the voted amount of that Claim shall be as specified in the proof of claim filed with the Clerk; A Claim that is the subject of an objection filed before the Voting Deadline shall be disallowed for voting purposes, except to the extent that the Court orders otherwise.
(b)
(c)
H.
Confirmation of Plan 1. Solicitation of Acceptances
The Debtor is soliciting your vote. The Debtor will bear the cost of any solicitation. No other additional compensation shall be received by any party for any solicitation other than as disclosed to the Bankruptcy Court. NO REPRESENTATIONS OR ASSURANCES, IF ANY, CONCERNING THE DEBTOR OR THE PLAN ARE AUTHORIZED BY THE DEBTOR OTHER THAN AS SET FORTH IN THIS DISCLOSURE STATEMENT. ANY REPRESENTATIONS OR INDUCEMENTS MADE BY ANY PERSON TO SECURE YOUR VOTE OTHER THAN THOSE CONTAINED IN THIS DISCLOSURE STATEMENT SHOULD NOT BE RELIED ON BY YOU IN ARRIVING AT YOUR DECISION ON HOW TO VOTE, AND SUCH ADDITIONAL REPRESENTATIONS OR INDUCEMENTS SHOULD BE REPORTED TO COUNSEL FOR THE DEBTOR FOR SUCH ACTION AS MAY BE DEEMED APPROPRIATE. THIS IS A SOLICITATION SOLELY BY THE DEBTOR, AND IS NOT A SOLICITATION BY ANY ATTORNEY OR ACCOUNTANT FOR THE DEBTOR. THE REPRESENTATIONS, IF ANY, MADE HEREIN ARE THOSE OF THE DEBTOR AND NOT OF SUCH ATTORNEYS OR ACCOUNTANTS, EXCEPT AS MAY BE OTHERWISE SPECIFICALLY AND EXPRESSLY INDICATED. Under the Bankruptcy Code, a vote for acceptance or rejection of a plan may not be solicited unless the claimant has received a copy of a disclosure statement approved by the Bankruptcy Court Page 8 of 36
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prior to, or concurrently with, such solicitation. This solicitation of votes on the plan is governed by Bankruptcy Code section 1125(b). Violation of Bankruptcy Code section 1125(b) may result in sanctions by the Bankruptcy Court, including disallowance of any improperly solicited vote. 2. Requirements for Confirmation of the Plan
At the Confirmation Hearing, the Bankruptcy Court shall determine whether the requirements of Bankruptcy Code section 1129 have been satisfied, in which event the Bankruptcy Court shall enter an Order confirming the plan. For the plan to be confirmed, Bankruptcy Code section 1129 requires that: (a) (b) The plan complies with the applicable provisions of the Bankruptcy Code; The debtor has complied with the applicable provisions of the Bankruptcy Code; The plan has been proposed in good faith and not by any means forbidden by law; Any payment or distribution made or promised by the debtor or by a person acquiring property under the plan for services or for costs and expenses in connection with the plan has been disclosed to the Bankruptcy Court, and any such payment made before the confirmation of the plan is reasonable, or if such payment is to be fixed after confirmation of the plan, such payment is subject to the approval of the Bankruptcy Court as reasonable; The Debtor has disclosed the identity and affiliation of any individual proposed to serve, after confirmation of the Plan, as a director, officer or voting trustee of the Debtor, an affiliate of the Debtor participating in the Plan with the Debtor, if any, or a successor to the Debtor under the Plan; the appointment to, or continuance in, such office of such individual is consistent with the interests of Creditors and with public policy; and the Debtor has disclosed the identity of any insider who will be employed or retained by the reorganized Debtor and the nature of any compensation for such insider; Any government regulatory commission with jurisdiction (after confirmation of the plan) over the rates of the debtor has approved any rate change provided for in the plan, or such rate change is expressly conditioned on such approval; With respect to each impaired Class of Claims, either each holder of a Claim of the Class has accepted the plan, or will receive or retain under the plan on account of that Claim property of a value, as of the Effective Date of the plan, that is not less than the amount that such holder would so receive or retain if Page 9 of 36
(c)
(d)
(d)
(e)
(g)
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the debtor were liquidated on such date under chapter 7 of the Bankruptcy Code. If Bankruptcy Code section 1111(b)(2) applies to the Claims of a Class, each holder of a Claim of that Class will receive or retain under the plan on account of that Claim property of a value, as of the Effective Date, that is not less than the value of that holders interest in the debtors interest in the property that secures that Claim; (h) Each Class of Claims has either accepted the plan or is not impaired under the plan; Except to the extent that the holder of a particular Administrative Claim or Priority Claim has agreed to a different treatment of its Claim, the plan provides that Administrative and Priority Claims shall be paid in full within the time limitations provided for under the Code; If a Class of Claim is impaired under the plan, at least one such Class of Claims has accepted the plan, determined without including any acceptance of the plan by any insider holding a Claim of that Class; and Confirmation of the plan is not likely to be followed by the liquidation or the need for further financial reorganization of the debtor or any successor to the debtor under the plan, unless such liquidation or reorganization is proposed in the plan.
(i)
(j)
(k)
The Debtor believes that the Plan satisfies all of the statutory requirements of the Bankruptcy Code for confirmation, as might be applicable, and that the Plan is proposed in good faith. The Debtor believes it has complied, or will have complied, with all the applicable requirements of the Bankruptcy Code governing confirmation of its Plan. 3. Acceptances Necessary to Confirm a Plan
Voting on a plan by each holder of a Claim (or its authorized representative) is important. Chapter 11 of the Bankruptcy Code does not require that each holder of a Claim vote in favor of a plan in order for the Court to confirm a plan. Generally, to be confirmed under the acceptance provisions of Bankruptcy Code section 1126(a), a plan must be accepted by each Class of Claims that is impaired under a plan by parties holding at least two-thirds in dollar amount and more than one-half in number of the Allowed Claims of such Class actually voting in connection with a plan. Even if all Classes of Claims accept a plan, the Bankruptcy Court may refuse to confirm a plan after which the debtor is either compelled to present another plan or convert the case to one under chapter 7 of the Bankruptcy Code.
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4.
Cramdown
In the event that any impaired Class of Claims does not accept a plan, the Bankruptcy Court may still confirm a plan at the request of the Debtor if, as to each impaired Class that has not accepted a plan, the plan does not discriminate unfairly and is fair and equitable. A plan of reorganization does not discriminate unfairly within the meaning of the Bankruptcy Code if no Class receives more than it is legally entitled to receive for its Claims. Fair and equitable has different meanings for holders of secured and unsecured Claims. With respect to a secured Claim, fair and equitable means either (i) the impaired secured Creditor retains its liens to the extent of its Allowed Claim and receives deferred cash payments at least equal to the allowed amount of its Claim with a present value as of the effective date of the plan at least equal to the value of such creditors interest in the property securing its liens, (ii) property subject to the lien of the impaired secured creditor is sold free and clear of that lien, with that lien attaching to the proceeds of sale, and such lien proceeds must be treated in accordance with clauses (i) and (iii) hereof; or (iii) the impaired secured creditor realizes the indubitable equivalent of its Claim under the plan. With respect to an unsecured Claim, fair and equitable means either (i) each impaired creditor receives or retains property of a value equal to the amount of its Allowed Claim or (ii) the holders of Claims that are junior to the Claims of the dissenting Class will not receive any property under the plan. In the event at least one Class of impaired Claims rejects or is deemed to have rejected the plan, the Bankruptcy Court will determine at the Confirmation Hearing whether the plan is fair and equitable and does not discriminate unfairly against any rejecting impaired Class of Claims. The Debtor believes that the Plan does not discriminate unfairly and is fair and equitable with respect to each impaired Class of Claims and is confirmable. The Plan specifically constitutes the Debtors request, pursuant to Bankruptcy Code section 1129(b)(l), that the Bankruptcy Court confirm the Plan notwithstanding the fact that the requirements of section 1129(a)(8) may not be met and its intent to pursue a cramdown if necessary to confirm the Plan. IV. BACKGROUND OF THE DEBTOR A. Nature of the Debtors Past and Present Business Operation
AENY is the owner of Evans Coal Corp. (ECC), a wholly owned subsidiary that operates several coal mines in Kentucky. ECC is a 34 year old company that was bought by AENY in April of 2010. At the time of the purchase, ECC held a series of bonds posted with the State of Kentucky, as is required under applicable law for all coal mine operators. Since AENY was a new company and had no track record regarding mining operations, it would have to post bonds substantially higher Page 11 of 36
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than those posted by ECC since it had a decades long operating history. In order to take advantage of the lower bond rates that ECC was able to keep, AENY decided to buy the company and operate it as a wholly owned subsidiary rather than to merge the companies, which would have required AENY to post bonds at a higher rate. Since the purchase of ECC, both companies have been operated as one company. AENY is a reporting company, that is, its stock is traded on the bulletin board, which in the past has required it to file reports on a regular basis with the Securities and Exchange Commission (SEC), but during the pendency of this case, AENY is exempted from filing any reports. Pursuant to advice from its auditors, AENY and ECC have consolidated its financial affairs in its reports to the SEC. B. Legal Structure and Ownership
The Debtor is a Nevada corporation in good standing. The company was originally formed as Trend Technology Corporation, which AENY obtained through a reverse merger. It has operated as Americas Energy Company since December 2009. C. Assets and Liabilities
In the Schedules of Assets and Liabilities filed in this case, the Debtor lists assets having an approximate, aggregate fair market value of approximately $19,889,656. In the Schedules of Assets and Liabilities, the Debtor lists liabilities of approximately $2,885,311 in secured debt and approximately $3,481,153 in priority and general unsecured debt. Reference is made to the Schedules of Asserts and Liabilities filed in this case. D. Selected Operating and Financial Data. 1. Historical Data
Attached as Exhibit A is the income and expenses for the two years proceeding the filing of the petition for relief and the income and expenses during the pendency of the case. 2. Liquidation Analysis
Attached as Exhibit D is the Debtors estimate of what its assets would generate in a hypothetical chapter 7 liquidation.
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3.
Summary of All Classes and Their Treatment
Attached as Exhibit C is a summary of all classes and their treatment. 4. Projected Income and Budget
Attached as Exhibit B is the Projected Income and Budget for the Debtor through 2013. 5. Representations
The referenced financial information represents the best estimates of the Debtor as to the items set forth therein and are believed by it to be based on assumptions that are reasonable. THE FINANCIAL INFORMATION CONTAINED HEREIN HAS NOT BEEN INDEPENDENTLY AUDITED FOR PURPOSES OF INCLUSION HEREIN. THE RECORDS KEPT BY THE DEBTOR RELY FOR THEIR ACCURACY UPON BOOKKEEPING PERFORMED INTERNALLY. THE DEBTOR HAS NOT CONSULTED WITH APPRAISERS AND ACCOUNTANTS REGARDING THE PREPARATION OF THE FINANCIAL INFORMATION. THEREFORE, THE DEBTOR IS UNABLE TO WARRANT OR REPRESENT THAT THE INFORMATION CONTAINED HEREIN IS WITHOUT ANY INACCURACY. E. Litigation 1. Pre-Filing Proceedings
Prior to the commencement of this case, the Debtor was involved in the following lawsuit file in the Laurel Circuit Court, Commonwealth of Kentucky: Prestige Processing, Inc. vs. Americas Energy Company Debtor had contracted with Prestige Processing, Inc., but after AENY concluded that Prestige Processing, Inc., had failed to fully disclose its projected operating expense, the Debtor terminated the agreement. As a result of the termination, Prestige Processing, Inc., sued the Debtor for breach of contract. That matter was in the discovery stage when the petition for relief was filed. No other litigation matters were pending at the time the petition for relief was filed.\ The Debtor was the subject of various administrative proceedings in Kentucky, though, for alleged violations of various environmental rules and regulations. A comprehensive of the proposed assessments against the Debtor is attached to the Debtors original Statement of Financial Affairs.
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2.
Post-Petition Proceedings
Shortly after the petition was filed, the Office of the United States Trustee filed a motion to have the Court approve the appointment of a chapter 11 trustee. Without considering any evidence or testimony, the Court approved the motion and two, chapter 11 trustees for both AENY and ECC. Both Debtors have filed their respective notices of appeal and have further requested that the Court remove the chapter 11 trustees. 3. Preferences and Other Avoidance Litigation
The Debtor reviewed all of its transactions within ninety days prior to the filing of the petition and found no evidence of any preferential transfers as described in 11 U.S.C. 547 and within one year and found no evidence of any fraudulent transfers as described in 11 U.S.C. 548, thus the Debtor has no pending avoidance or preference actions. V. EVENTS LEADING TO THE FILING OF THE PETITION FOR RELIEF Reasons for Filing Chapter 11 The Debtor is the sole owner of Evans Coal Corp., a coal mining company operating in Kentucky. During the year preceding the filing of the petition for relief, the Debtor was continuing to mine coal from its surface mines while trying to recover from the substantial damages it incurred when it was using the services of a coal mining contractor who apparently was not competent to provide the services it had contracted to perform. As a result of its wholly deficient operations, AENY/ECC were left with substantial obligations to remediate various work sites, which consumed substantial amounts of funds and time. Further, since AENY/ECC were facing proposed assessments directly related to the deficient work done by the contract miner, and further since AENY/ECC were running out of funds to continue its business operations, AENY and ECC decided to file petitions for relief to avoid pending litigation from its creditors for unpaid debts, including the office building AENY uses for its corporate headquarters. VI. POST-PETITION OPERATIONS AND SIGNIFICANT EVENTS A. Post-Petition Operations
As of the Petition Date, since the Debtor has decided to reorganize its debt, liquidate all of the coal mining assets owned by Evans Coal Corp., and use the remaining funds after paying all underlying secured claims and pay its unsecured creditors over a period of up to five years. AENY anticipate generating sufficient funds to pay all creditors claim in full. Page 14 of 36
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B.
Significant Orders Entered During the Case 1. Initial Activity
Pursuant to a motion filed by the Office of the United States Trustee to appoint chapter 11 trustees, the Court granted the motion on December 22, 2011 and two chapter 11 trustees were appointed on December 22, 2011 in the respective chapter 11 cases. Based on their considered opinion that there was no evidence or testimony to support the motions, both Debtors have filed their respective notices of appeal and further have filed motions to have the trustees removed. 2. The Official Unsecured Creditors Committee
As of the date this Disclosure Statement was being prepared, no Official Unsecured Creditors Committee has been appointed in this chapter 11 case. 3. Current Activity
Since the petition for relief was filed, the Debtor has filed a motion to consolidate its case with that filed for its wholly owned subsidiary, a motion to stay the order appointing the chapter 11 trustee and a motion to remove the trustee. All motions were pending at time the plan was filed. 4. Adequate Protection Issues
As of the date this Disclosure Statement was filed, the only creditor that has filed a motion for adequate protection is CCMT Properties, the mortgagee on the office building owned by the Debtor. That motion is pending. No other adequate protection motions have been filed. The Debtor has filed a motion for authority to use cash collateral, which motion is pending. 5. Employee Actions
The Debtors employees are all employed by AENY, but approximately all of the work done by these employees is related to work done for the benefit of ECC. All AENY employees were laid off by the chapter 11 trustee on December 30, 2011. No employees have filed any action against the Debtor.
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6.
Application to Retain Professionals
The Debtor has elected to retain bankruptcy counsel to prosecute its chapter 11 case. The application was pending at the time this Disclosure Statement was filed. VII. DESCRIPTION OF THE PLAN A. Introduction
The Debtor is proposing to pay in full all Claims in all Classes either from income generated from the sale of essentially all of its equipment and coal leases held by its wholly owned subsidiary, ECC, in Kentucky, or from future operations from other business ventures that the Debtor is currently contemplating. The Debtor would represent that the income from the sale of the assets owned by ECC are more than sufficient to pay all secured and unsecured claims immediately after the completion of the sale, it nevertheless is proposing to retain all proceeds after paying all underlying secured claims and use the funds for other business opportunities. The Debtor will propose to keep two coal leases that the Debtor anticipate will generate sufficient income to pay all unsecured creditors over a period of up to five years. Projections for the proceeds of the sale of the leases and equipment are attached as Exhibits hereto. Projections of the income from the operation of what it proposes will be the one coal lease it is proposing to keep is also attached as an Exhibit hereto. A summary of the principle provisions of the Plan and the treatment of Classes of Allowed Claims is set out below. The summary is entirely qualified by the Plan. This Disclosure Statement is only a summary of the terms of the Plan; it is the Plan and not the Disclosure Statement that governs the rights and obligations of the parties. As described in Paragraph II B and III H 4 above, Bankruptcy law provides that a plan be confirmed under the cramdown provisions of the Bankruptcy Code over the objection of certain classes of creditors. In practice, if a particular class votes against a plan that proposes to pay the members of that class less than their claims in full, that class ordinarily can invoke the absolute priority rule, which requires the proponent of a plan to pay the objecting class in full before any class subordinate to that class can participate in any distributions from the plan. Notwithstanding the protection that rule ordinarily provides to all classes of creditors, if a proponent proposes to pay all classes of creditors at least as much as they would receive in hypothetical liquidation, and the proponent offers new value to the estate, the Debtor may be permitted to retain certain value.
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B.
Designation of Claims THE AMOUNTS OF CLAIMS IN THE VARIOUS CLASSES AND THE NUMBER OF HOLDERS OF SUCH CLAIMS CANNOT NOW BE EXACTLY DETERMINED. WHILE THE DEBTOR HAS REFLECTED IN THE SCHEDULES, AS THEY MAY BE AMENDED PRIOR TO VOTING ON THE PLAN, THE DEBT AND CLAIMANTS KNOWN TO IT OR REFLECTED ON THEIR BOOKS, INFORMATION CONCERNING ALL CLAIMS ASSERTED COULD NOT BE COMPILED IN TIME FOR INCLUSION HEREIN. THEREFORE, THE AMOUNT OF CLAIMS IN THE VARIOUS CLASSES AND THE NUMBER OF HOLDERS OF SUCH CLAIMS SET FORTH HEREIN ARE ESTIMATES. HOWEVER, THE DEBTOR BELIEVES THE ESTIMATES TO BE REASONABLY ACCURATE.
The following is a designation of the Classes of Claims for all creditors under the Plan. In accordance with Bankruptcy Code section 1123(a)(l), Administrative Expenses, and Fee Claims have not been classified and are excluded from the following Classes. A Claim is classified in a particular Class only to the extent that the Claim qualifies within the description of that Class, and is classified in another Class or Classes to the extent that any remainder of the Claim qualifies within the description of such other Class or Classes. A Claim is classified in a particular Class only to the extent that the Claim is an Allowed Claim in that Class and has not been paid, released or otherwise satisfied before the Effective Date; a Claim which is not an Allowed Claim is not in any Class. Notwithstanding anything to the contrary contained in the Plan, no distribution shall be made on account of any Claim that is not an Allowed Claim. Class 1 Secured Claim held by Barbara Evans Class 2 Secured Claim Held by CCMT Properties, Inc. Class 3 Secured Claim Held by John Gargis Class 4 Secured Claims Held by Chester Franklin Class 5 Priority Unsecured Claims Held by Wage Claimants Class 6 Priority Unsecured Claim Held by IRS Class 7 Priority Unsecured Claims for Ad Valorem Taxes Class 8 Priority Unsecured Claims Held by State Agencies Class 9 General Unsecured Claims
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Class 10 Unsecured Class for Litigation Claim Class 11 Shareholders C. Estimated Size of Allowed Claims in Classes Class 1 2 3 4 5 6 7 8 9 10 11 D. Size 1 1 1 2 10 1 2 1 57 1 Unknown Impaired Yes Yes Yes Yes Yes No Yes Yes Yes Yes Yes Amount $1,561,609 $850,000 $50,000 $34,627 $135,450 $1,250 $16,665 To Be Determined $2,161,738 To Be Determined Unknown
Treatment of Claims 1. Treatment of Unclassified Claims (a) Administrative Expenses and Fee Claims
Administrative Expenses are Claims for any cost or expense of the chapter 11 case allowable under Bankruptcy Code sections 503(b) and 507(a)(1). Those expenses include all actual and necessary costs and expenses related to the preservation of the Debtors estate, all claims to cure payments arising from the assumption of executory contracts and unexpired leases under Bankruptcy Code section 365, and all United States Trustee quarterly fees. Under the Plan, all Administrative Expenses shall be treated as follows:
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The holder of any Administrative Expense other than (i) a Fee Claim, (ii) a liability incurred and paid in the ordinary course of business by the Debtor, or (iii) an Allowed Administrative Expense, must file with the Bankruptcy Court and serve on the Debtor and the Office of the United States Trustee and their respective counsel, notice of such Administrative Expense within THIRTY days after the Effective Date. Any claims, other than those owed to the Office of the United States Trustee, filed after the deadline stated above shall not be allowed. (b) Fee Claims
Each Person asserting a Fee Claim for services rendered or expenses incurred before the Effective Date shall file with the Bankruptcy Court, and served on the U. S. Trustee, the Debtor and its counsel, a Fee Application within forty-five days after the Effective Date. (c) Allowance of Administrative Expenses
An Administrative Expense with respect to which notice has been properly filed and served pursuant to the Plan shall become an Allowed Administrative Expense if no objection is filed within thirty days after the filing and service of notice of such Administrative Expense, subject to an independent judgment by the Court that the Administrative Expense should be allowed, even if no objection is filed. If an objection is timely filed, the Administrative Expense shall become an Allowed Administrative Expense only to the extent allowed by Final Order. An Administrative Expense that is a Fee Claim, and with respect to which a Fee Application has been timely filed pursuant to Article 4 of the Plan, shall become an Allowed Administrative Expense only to the extent allowed by Final Order. Each holder of an Allowed Claim for an Administrative Expense shall receive from the Debtor the amount of such holders Allowed Claim in cash on the Effective Date or as may be agreed by holder of the Administrative Expense. Professional fees for the undersigned attorney, appraisers, auctioneers and accountants are estimated will be $250,000. (d) Post Petition Priority Tax Claims
The Debtor does not anticipate having any Post Petition Priority Tax Claims after the Effective Date; to the extent there is such a claim it will be treated as follows: Each holder of an Allowed Priority Tax Claim shall receive (i) the amount of such holders Allowed Claim in one cash payment on the Effective Date; (ii) such other treatment to which the holder of such Allowed Priority Tax Claim and the Debtor
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may agree in writing; or (iii) in accordance with Bankruptcy Code section 1129(a)(9)(C). 2. Classification and Treatment of Claims (a) General
The claims set forth for each Class are based on information known to the Debtor as of the filing date of this Disclosure Statement. The Plan provides that the Debtor will, in the ordinary course of business, direct its efforts continue to liquidates all of its assets to fund the Plan. (b) Class 1 Secured Claim Held by Barbara Evans
Class 1 is comprised of the secured claim of Barbara Evans in the amount of $1,561,609. The claim of is fully secured by a first lien position in all of Debtors leases and all but two pieces of coal mining equipment. The debt was created as a result of the sale of Evans Coal Corp., to AENY. AENY proposes to pay said claim as follows: The Debtor anticipates that prior to confirmation of the plan of reorganization that all of the assets pledged to Barbara Evans will be sold pursuant to Court authority, and that all secured claims against those assets will be paid at the conclusion of the sale, thus the treatment in this Class is mooted. Should the sale not be conducted until after the plan is confirmed, the Debtor proposes to conduct the sale pursuant to the terms of the plan and pay all secured claims against those assets at the conclusion of the sale. As stated above, if the sale is conducted before the confirmation of the plan, the claim holder would not be impaired and this class is mooted. If the proposed sale is not conducted until after the plan is confirmed, the holder of the Class 1 claim is impaired and therefore is eligible to vote on the Plan. (c) Class 2 Secured Claim Held by CCMT Properties, Inc.
Class 2 is comprised of the secured claim held by CCMT Properties, Inc., for the office building pledged to the mortgagee by the Debtor. The claim will be satisfied in full and in cash as follows: The Debtor will return the building to the secured creditor either six months from the date of entry of an agreed Order lifting the automatic stay or, (ii) thirty days following receipt of written notice the property is being sold or leased. Page 20 of 36
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The holder of the Class 2 claim is not impaired and therefore is not eligible to vote on the Plan. (d) Class 3 Secured Claim Held by John Gargis
Class 3 is comprised of the secured claim of John Gargis in the amount of $50,000. The claim of is fully secured by a first lien position in one of Debtors leases identified as the Hammons Lease. The debt was created as a result of the sale of a loan made to AENY by Gargis. AENY proposes to pay said claim as follows: The Debtor anticipates that prior to confirmation of the plan of reorganization that the assets pledged to John Gargis will be sold pursuant to Court authority, and that the secured claim against that asset will be paid at the conclusion of the sale, thus the treatment in this Class is mooted. Should the sale not be conducted until after the plan is confirmed, the Debtor proposes to conduct the sale pursuant to the terms of the plan and pay all secured claims against all assets at the conclusion of the sale. As stated above, if the sale is conducted before the confirmation of the plan, the claim holder would not be impaired and this class is mooted. If the proposed sale is not conducted until after the plan is confirmed, the holder of the Class 3 claim is impaired and therefore is eligible to vote on the Plan. (e) Class 4 Secured Claim Held by the Chester Franklin
Class 4 is comprised of the secured claims totaling $34,627 held by Chester Franklin for two trucks he financed for the Debtor. The claims will be paid in full and in cash as follows: Beginning on the Effective Date the Debtor will make regular payments of $669/month over a period of five years at 6% interest. The holder of the Class 4 claim is impaired and therefore eligible to vote on the Plan. (f) Class 5 Priority Unsecured Claims Held by Wage Claimants
Class 5 is comprised of the priority unsecured claims totaling $135,450 held by various employees. The claim will be paid in full and in cash as follows:
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Beginning on the Effective Date the Debtor will make regular payments of $11,657.70/month on a pro rata basis to wage claimants over a period of one year at 6% interest. The holders of the Class 5 claims are impaired and therefore eligible to vote on the Plan. (g) Class 6 Priority Unsecured Claim Held by IRS
Class 6 is comprised of the priority unsecured claims totaling $1,250 held by the Internal Revenue Service. The claim will be paid in full and in cash as follows: On the Effective Date the Debtor will pay the claim in full. The holders of the Class 6 claims is not impaired and therefore not eligible to vote on the Plan. (h) Class 7 Priority Unsecured Claim Held by Taxing Authorities
Class 7 is comprised of the priority unsecured claims totaling $16,665 held by two taxing authorities for property taxes on property located in Knoxville, Tennessee. The claims will be paid in full and in cash as follows: Beginning on the Effective Date the Debtor will make regular payments of $2,874/month on a pro rata basis to the taxing authorities claimants over a period of six months at 12% interest. The holders of the Class 7 claims are impaired and therefore are eligible to vote on the Plan. (i) Class 8 Priority Unsecured Claims
Class 8 is comprised of the priority unsecured claims in amount to be determined held by the Commonwealth of Kentucky for liquidated and proposed assessments for alleged violations of various environmental laws. The claims will be paid in full and in cash as follows: The Debtor anticipates that prior to confirmation of the plan of reorganization that all of the assets in the Commonwealth of Kentucky will be sold pursuant to Court authority, and that all claims will be paid at the conclusion of the sale, thus the treatment in this Class is mooted. Should the sale not be conducted until after the Page 22 of 36
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plan is confirmed, the Debtor proposes to conduct the sale pursuant to the terms of the plan and pay all secured claims against those assets at the conclusion of the sale. As stated above, if the sale is conducted before the confirmation of the plan, the claim holder would not be impaired and this class is mooted. If the proposed sale is not conducted until after the plan is confirmed, the holder of the Class 8 claim is impaired and therefore is eligible to vote on the Plan. (j) Class 9 General Unsecured Claims
Class 9 is comprised of the general unsecured claims held creditors which the Debtor estimates is a total of $2,161,738. The claims will be paid in cash as follows: Beginning on the Effective Date the Debtor will make regular payments of $40,795/month paid pro rata to the various claim holders for a period of five years with interest at a rate of 5% per annum. The holders of the Class 9 claims are impaired and are eligible to vote on the Plan. (k) Class 10 Litigation Class
Class 10 is comprised of the disputed claim held by Prestige Processing, Inc., as a result of a lawsuit for damages that was pending at the time the petition for relief was filed. The Debtor will file an objection to claim before the confirmation date. Further, the Debtor contends that the claim is not liable for any damages and is instead entitled to no damages. The claim as it may ultimately be determined will be paid in cash as follows: Beginning on the Effective Date the Debtor will make regular payments to be paid to over a period of five years at 5% interest per annum. The holder of the Class 10 claim is impaired and is eligible to vote on the Plan. (l) Class 11 Shareholders
Class 11 is comprised of all the Debtors shareholders and holders of warrants. Beginning on the Effective Date and for a period not to exceed thirty days, all shareholders will be issued one new share in the reorganized debtor for each twenty shares returned to the designated transfer agent. All current shareholders must provide proof of identity and address to be entitled to receive new Page 23 of 36
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shares and must bear the expenses for the services of the transfer agent. The thirty day period allowed for shareholders to exchange their shares will expire at 5 p.m., Eastern Standard Time, on the thirtieth day. All warrants will be canceled on the Effective Date. E. Means of Implementation of the Plan
The Debtor is proposing to pay in full all Claims in all Classes either from income generated from the sale of essentially of its equipment and coal leases held by its wholly owned subsidiary, ECC, in Kentucky, or from future operations from other business ventures that the Debtor is currently contemplating. The Debtor would represent that the income from the sale of the assets owned by ECC are more than sufficient to pay all secured and unsecured claims immediately after the completion of the sale, it nevertheless is proposing to retain all proceeds after paying all underlying secured claims and use the funds for other business opportunities. The Debtor will propose to keep one coal lease that the Debtor anticipate will generate sufficient income to pay all unsecured creditors over a period of up to five years. Projections for the proceeds of the sale of the leases and equipment are attached as Exhibits hereto. Projections of the income from the operation of what it proposes will be the one coal lease it is proposing to keep is also attached as an Exhibit hereto. 1. Powers and Duties of the Reorganized, Post-Confirmation Debtor
Subject to the provisions of the Plan, the reorganized, post-confirmation Debtor will take possession of the Assets and will liquidate essentially all of the assets held by its wholly owned subsidiary, Evans Coal Corp. The reorganized, post-confirmation Debtor will have the sole right, power and discretion to manage the affairs of the Debtor, to enter into contracts or agreements binding the Debtor and to execute instruments necessary in connection with the performance of his duties. The reorganized, post-confirmation Debtor will be the successor to the pre-petition Debtors Estate pursuant to Code section 1123(b)(3) and will have the power to prosecute any claims of the Debtors Estate that the Debtor in good faith believes to be valid. Additionally, the reorganized, postconfirmation Debtor will have power to do all acts contemplated by the Plan and other acts that may be necessary or appropriate for it operation of its business in the ordinary course of business. The estate assets will re-vest to the chapter 7 estate in the event the case is converted to chapter 7.
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2.
Distributable Cash
At the time this Disclosure is being prepared, the Debtor estimates it will generate approximately $5,000,000 of cash after all secured claims are paid in full. The balance of the funds will be used to pay all remaining classes over a period of up to five years. The Debtor also anticipates receiving regular income from the coal lease it anticipates keeping. 3. Retention of Professionals
The reorganized, post-confirmation Debtor may retain Professionals to effectively administer the estate on terms approved by the Bankruptcy Court. All professionals who have been retained will be continue to assist the Debtor to implement it plan of reorganization and after the Final Decree has been entered will be paid by the Debtor in the ordinary course as agreed by the Debtor and the respective professionals who will be providing the services. F. Provisions Governing Distribution
Any payments or distributions to be made by the Debtor pursuant to the Plan shall be made according the terms provided for in the Plan, or as may be ordered by the Bankruptcy Court. Distributions and deliveries to holders of Allowed Claims shall be made at the addresses set forth on the proofs of Claim filed by such holders (or at the last known addresses of such holders if no proof of Claim or proof of interest is filed; or if the Debtor has been notified of a change of address, at the address set forth in such notice. All claims for undeliverable distributions shall be made on or before the second anniversary of the Initial Distribution Date. After such date, all Unclaimed Property shall revert to the estate for distribution of an additional Pro Rata Share to all classes on a pro rata basis, and the Claim of any other holder with respect to such Unclaimed Property shall be discharged and forever barred. No interest shall be paid on any Claim unless, and only to the extent that, the Plan specifically provides otherwise. G. Contested and Contingent Claims The Debtor has one contested Claims, the Claim held by Prestige Processing, Inc.
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H.
Executory Contracts and Leases
The Bankruptcy Code gives the Debtor the power, subject to the approval of the Bankruptcy Court, to assume or reject executory contracts and unexpired leases. Rejection or assumption may be effected either pursuant to a Plan of Reorganization or by order of the Bankruptcy Court entered upon motion of the Debtor after notice and a hearing. If an executory contract or unexpired lease is rejected, the other party to the agreement may file a claim for damages incurred by reason of the rejection within such time as the Bankruptcy Court may allow. In the case of rejection of employment agreements and leases of real property, the damages are limited under the Bankruptcy Code. In the case of assumption of an executory contract or unexpired lease, the Bankruptcy Code requires that the debtor promptly cure or provide adequate assurances that they promptly will cure any existing defaults (other than certain types of defaults based upon bankruptcy or the Debtors financial condition) and provide adequate assurances of future performance under such executory contracts or unexpired leases. The Debtor has several executory contracts listed at one of the attached Exhibits. I. Maintenance of Causes of Action Debtor knows of no avoidance actions or other causes of action they might have. J. Discharge
All claims, upon the sale of the underlying collateral shall be discharged in accordance with section 1141. All unsecured claims shall be discharged, if applicable, in accordance with Section 1141. The Debtor anticipates that all claims will be paid in full thus does not expect to discharge any debt. K. Retention of Jurisdiction The Plan provides for the retention of jurisdiction by the Bankruptcy Court over the chapter 11 cases for the purpose of determining all disputes relating to Claims and other issues presented by or arising under the Plan and to determine all other matters pending on the date of confirmation. L. Amendments of the Plan
The Debtor may amend or modify the Plan before or after confirmation in accordance with the provisions of Section 1127 of the Bankruptcy Code.
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M.
Termination of Trustee and Committees
No creditors committees were appointed in these cases. The Trustee will be removed from the case upon confirmation of the plan. N. Management and Operation of the Debtor
After confirmation of the Plan, the Debtors business operations will be conducted as they were prior to the filing of the petition for relief except that all the assets will be sold either pursuant to Court authority before confirmation of the plan or pursuant to the terms of the plan. O. Insiders and Directors
Debtor is a publicly traded corporation. The Debtor, whose management has been responsible for all the business functions of ECC, is proposing the following management of officers and board members after the plan is confirmed: Directors Ron Scott, Executive, Chairman Christopher L. Headrick Additional board members to be announced later Executive Officers Christopher l. Headrick, President and Chief Executive Officer John W. Gargis, Executive Vice President Hong Duan, Ph.D., Chief Financial Officer Jesse Blanco, Corporate Secretary Compensation. The offices will be paid salaries as follows: Christopher l. Headrick $15,000/month John W. Gargis, $10,000/month Hong Duan, Ph.D., $10,000/month Ron Scott, $10,000/month Jesse Blanco, $10,000/month Page 27 of 36
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New employment agreements will be issued. VIII. FEASIBILITY AND RISKS A. Feasibility of Confirmation Several factors can be considered to determine whether the Plan is feasible, including: 1. Will the plan reorganize the Debtors financial structure in such a way that the reorganized Debtor will be able to generate necessary cash flow? Will the reorganized Debtor be solvent? Will he be able to meet its fixed and contingent payment obligations provided for under the Plan as well as obligations incurred in the ordinary course of business, both from a cash flow and an accounting standpoint? Will its solvency be based only on the use of quasi-organization accounting rather than inherent asset values? Does the reorganized business activity have a reasonable likelihood to operate profitably in the future? Will its cash flow be sufficient? Is the Debtor sufficiently qualified to handle the operational, financial and other problems likely to be encountered?
2.
3.
4.
The Debtor in this case would disclose the following: 1. The Debtor will be generating income from the sale of essentially of its assets in Kentucky and from the royalties generated from one coal lease it anticipate keeping. The Debtor does anticipate to realize an increase in the value of its assets, some of which will be sold and the proceeds applied to pay allowed claims. It is anticipated that the cash flow from the liquidation of the assets will be sufficient to meet all the fixed and contingent obligations for the Debtor under the Plan as well as those incurred in the ordinary course of business.
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3.
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4.
The Debtor is sufficiently qualified to handle the operational, financial and other problems likely to be encountered.
B.
Risks Associated with the Plan
There is a risk, though not anticipated, that the Debtor will not be able to generate sufficient cash flow to satisfy the terms of the Plan. Notwithstanding that, the Debtor has an excellent, longstanding reputation as a real estate developer who has build quality homes and expects to be able to liquidate its assets for a sufficient return to pay all claims in full within one year. IX. ALTERNATIVES TO PLAN AND LIQUIDATION ANALYSIS There are three possible consequences if the Plan is rejected or if the Bankruptcy Court refuses to confirm the Plan: (i) the Bankruptcy Court could dismiss the Debtors chapter 11 case, (ii) the Debtors chapter 11 case could be converted to one under a chapter 7 liquidation, or (iii) the Bankruptcy Court could consider an alternative Plan of Reorganization proposed by some other party. A. Dismissal
If the Debtors case were to be dismissed, it would no longer have the protection of the Bankruptcy Court and the applicable provisions of the Bankruptcy Code. Claims that were pending before the petition for relief was filed would likely be asserted again, draining the limited assets of the Debtor. The Debtor anticipates that a dismissal would compel it to re-file a second petition for relief under chapter 7, liquidate its assets on an expedited basis, after which there likely would be no distributions to any unsecured creditors, priority or otherwise. B. Chapter 7 Liquidation
The starting point in determining the amount which members of each impaired class of unsecured Claims would receive in a chapter 7 case is to estimate the dollar amount that would be generated from the liquidation of the Debtors assets (the Liquidation Proceeds). The Liquidation Proceeds of the Debtor would consist of the proceeds from the sale of all of the assets of the Debtor. The Liquidation Proceeds would then be reduced by the costs of the liquidation. The Debtors costs of liquidation under chapter 7 would likely include the fees of trustees, as well as those of counsel and other professionals who would be retained by the trustee; selling expenses; any unpaid expenses Page 29 of 36
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incurred by the Debtor during its reorganization case under chapter 11 (such as fees for attorneys, financial advisors, and accountants); and claims arising by reason of the trustees rejection of contractual obligations incurred by the Debtor during the pendency of the chapter 11 case. These claims, and such other claims which are likely to arise during the liquidation process under chapter 7 will result in a diminution of the Liquidation Proceeds available to pay unsecured creditors. The present value of the distributions from the Liquidation Proceeds (after subtracting the amounts described above) are then compared with the present value offered to each of the classes of unsecured Claims of each such class. There are a number of factors which lead to the conclusion that in a chapter 7 liquidation all impaired Classes of creditors would receive even smaller values than those suggested by the Liquidation Analysis. First and foremost, the Liquidation Proceeds would be substantially reduced in paying the costs of liquidation, and the priority and the administrative claims referred to above. After considering the effect that a chapter 7 liquidation would have on the value of the Debtors assets, including the costs of a chapter 7 liquidation, the adverse effect of a forced sale on the prices which could be realized for the assets, the adverse impact on its business operations and the delay in the distributions of liquidation proceeds, THE DEBTOR BELIEVES THAT EVERY IMPAIRED CLASS OF CLAIMS WILL RECEIVE DISTRIBUTIONS UNDER THE PLAN WHICH HAVE A SUBSTANTIALLY GREATER PRESENT VALUE THAN THAT WHICH SUCH CLASSES WOULD RECEIVE IN A CHAPTER 7 LIQUIDATION. C. Alternative Plan
No alternative plans have been proposed by any other party in interest at this time. If an alternative plan were proposed, it would more than likely propose a liquidation of the Debtor and the distribution of cash to Creditors. In comparison to the Debtors Plan, an alternative plan would not likely provide any greater return to Creditors and any return could even be less due to the additional time and expense necessary to obtain approval of any alternative plan. X. SECURITIES CONSIDERATIONS A. The Section 1145 Exemption From Securities Act Registration of Securities Issued Under the Plan Page 30 of 36
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Section 1145 of the Bankruptcy Code provides that federal and state registration requirements do not apply to the issuance of securities by a Debtor under a Plan of Reorganization to holders of Claims or Interests wholly or principally in exchange for those Claims or Interests. With certain exceptions discussed below, recipients of such securities may also resell them without restriction. B. Issuance
Section 1145 of the Bankruptcy Code exempts the original issuance of securities under a Plan of Reorganization from registration under the Securities Act and state law. For the original issuance to be exempt, three principal requirements must be satisfied: (i) the securities must be issued by the Debtor or its successor under a plan of reorganization; (ii) the recipients of the securities must hold a Claim against the debtor, an Interest in the Debtor or a Claim for an administrative expense against the Debtor; and (iii) the securities must be issued entirely in exchange for the recipients Claim against or Interest in the Debtor, or principally in such exchange and partly for cash or property. Debtor believes that, subject to certain conditions described below, the contemplated issuances of the Common Stock of reorganized AENY will satisfy all three conditions because: (i) those issuances are specifically required under the Plan; (ii) the recipients are holders of Claims against or Interests in the Debtor; and (iii) the recipients will obtain securities in the reorganized company in exchange for their Claims or Interests. C. Resale
Although Debtor believes the subsequent disposition of the Common Stock of reorganized AENY by its recipients would be exempt from registration and not subject to holding periods in most circumstances, certain recipients of the securities those recipients who may be deemed underwriters as defined under section 1145(b) of the Bankruptcy Code may be unable to resell such securities absent registration of those securities under The Securities Act of 1933, as amended (the Securities Act) and applicable state law or absent exemption therefrom. DEBTOR RECOMMENDS THAT SHAREHOLDERS AFFECTED BY THIS RISK CONSULT THEIR OWN COUNSEL. Bankruptcy Code section 1145(b) defines four types of underwriters: (i) a person who purchases Claims against, an Interest in, or a Claim for administrative expenses against the Debtor with a view to distributing any security received in exchange for such a Claim or Interest; (ii) a person who offers to sell securities offered under a Plan of Reorganization for the holders of such securities; (iii) a person who offers to buy such securities for the holders of such securities, if the Page 31 of 36
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offer is (a) with a view to distributing them or (b) made under a distribution agreement; and (iv) a person who is an issuer with respect to the security, as the term issuer is defined in Section 2(11) of the Securities Act, an issuer includes any person directly or indirectly controlling or controlled by the Debtor, or any person under direct or indirect common control with the Debtor. Whether a person is an issuer, and therefore an underwriter for purposes of Section 1145(b) of the Bankruptcy Code depends on a number of factors. These include: (i) the persons equity interest in a company; (ii) the distribution and concentration of other equity interest in a company; (iii) whether the person is an officer or director of the company; (iv) whether the person, either alone or acting in concert with others, has a contractual or other relationship giving that person power over management policies and decisions of the company; and (v) whether the person actually has such power notwithstanding the absence of formal indicia of control. An officer or director of the company may be deemed a controlling person, particularly if his position is coupled with ownership of a significant percentage of voting stock. In addition, the legislative history of section 1145 of the Bankruptcy Code suggests that a creditor with at least 20% of the securities of a Debtor could be deemed a controlling person. To the extent that persons deemed underwriters receive securities pursuant to the Plan, resales by such persons would not be exempted by section 1145 of the Bankruptcy Code from registration under the Securities Act. Given the complex, subjective nature of the question whether a particular holder may be an underwriter, Debtor makes no representation concerning the right of any person to trade in the Common Stock of reorganized AENY. Debtor recommends that potential recipients of the Common Stock in the reorganized company consult their own counsel concerning whether they may freely trade such securities. B. Sections 12 and 16(b) of the Securities Exchange Act of 1934 (the Exchange Act)
Debtor anticipates that the Common Stock of reorganized AENY will not be required to be registered under Section 12 of the Exchange Act because, among other reasons, the Common Stock was previously registered. Nevertheless, Debtor anticipates that it will continue to be obligated under the Exchange Act to comply with the Securities and Exchange Commissions (the Commission) periodic reporting requirements. Section 16(a) of the Exchange Act will require any officer, director, and 10% shareholder of reorganized AENY who has not previously filed a Form 3 with respect to AENY to file a Form 3 with the Commission immediately subsequent to such person becoming an officer, director, or 10% shareholder, and thereafter, to report changes in such persons equity holdings in reorganized AENY to the Commission on Form 4. Page 32 of 36
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Section 16(b) of the Exchange Act will also apply to certain transactions in the equity securities by any officer, director, or beneficial owner of more than 10% of the equity securities of reorganized AENY. Under Section 16(b), any profits made by such a person by virtue of any purchase and any sale within a period of less than six months will inure to the benefit of reorganized AENY, which may sue to recover such profit. A shareholder may initiate a derivative suit for the same purpose. Although the law in the area is unclear, it is possible that the receipt of the Common Stock of reorganized AENY could constitute a purchase for purposes of Section 16(b) of the Exchange Act. Accordingly, any person subject to Section 16(b) at the time of such purchase likely could not sell any of such securities within six months thereafter at a profit without incurring a liability for the amount of such profit. Debtor recommends that any person who may be subject to Section 16(b) consult with counsel if s/he intends to sell securities received under the Plan within six months after their receipt. XI. DESCRIPTION OF COMMON STOCK A. General
The Plan contemplates the authorization of 100,000,000 shares of reorganized AENY authorized and available for distribution. The new shares will be exchanged on a one new share for twenty old shares of the Debtor pursuant to the terms described above. On the Effective Date and for a period not to exceed thirty days, all shareholders will be issued one new share in the reorganized debtor for each twenty shares returned to the designated transfer agent. All current shareholders must provide proof of identity and address to be entitled to receive new shares and must bear the expenses for the services of the transfer agent. The thirty day period allowed for shareholders to exchange their shares will expire at 5 p.m., Eastern Standard Time, on the thirtieth day. All shares of stock will be tradable except as follows: all current holders of AENY Common Stock will have their shares of stock cancelled and new shares of stock will be issued on a twentyfor-one ratio on the Effective Date. Stockholders do not have preemptive rights or other rights to subscribe for additional shares, and the Common Stock of reorganized AENY are not subject to conversion or redemption. Each share of Common Stock of reorganized AENY are entitled to one vote. After confirmation, all voting power of reorganized AENY will reside in the holders of the Page 33 of 36
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Common Stock. Holders of Common Stock of reorganized AENY do not have cumulative voting rights in the election of directors. The Common Stock of reorganized AENY when issued as described herein, will be duly issued, fully paid and nonassessable. B. Dividends
Holders of Common Stock of reorganized Debtor will be entitled to receive dividends when and as declared by the Board of Directors out of funds legally available for such payment. AENY cannot anticipate when such dividends, if any, will be available for distribution. C. Transfer Agent
A transfer agent and registrar for the Common Stock of reorganized Debtor shall be designated by AENY. A different transfer agent and registrar for the Common Stock of reorganized Debtor may be selected prior to the Distribution Date. XII. OFFICERS AND DIRECTORS A. Stock Ownership by Officers and Directors
The current records of AENY indicate that none of the current officers and directors are the beneficial owners of more than 5% of common stock of AENY other than Christopher Headrick, who holds 7.63% of the outstanding shares. As a result of the implementation of the Plan, no officer or other director will hold 5% beneficial interest in AENY other than Mr. Headrick. B. Other Information About Officers and Directors
Set forth below are the names and certain information regarding the directors and proposed officers of the Debtor. Directors Ronald A. Scott, Executive Chairman Christopher L. Headrick Additional board members to be announced later Page 34 of 36
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Executive Officers Christopher L. Headrick, President & Chief Executive Officer John W. Gargis, Executive Vice-President Hong Duan, Ph.D., Chief Financial Officer Jesse Blanco, Secretary Compensation The officers will be paid salaries as follows: Ronald A. Scott, $10,000 month Christopher L. Headrick, $15,000 month John W. Gargis, $10,000 month Hong Duan, Ph.D., $10,000 month Jesse Blanco, $10,000 month XIV. CONCLUSION This Disclosure Statement has attempted to provide information regarding the Debtors chapter 11 estate and the potential benefits that might accrue to holders of Claims against the Debtor under the Plan as proposed. The Plan is the result of extensive efforts by the Debtor and its advisors to provide the holders of Allowed Claims with a meaningful dividend. The Debtor believes that the Plan is feasible and will provide each holder of a Claim against the Debtor with an opportunity to receive greater benefits than those that would be received by conversion of this chapter 11 cases to ones under chapter 7. The Debtor, therefore, urges creditors to vote in favor of the Plan. Dated: January 18, 2012 Americas Energy Company /s/ Chris Headrick _______________________________________ Chris Headrick, President
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/s/ James R. Moore _______________________________________ James R. Moore Moore & Brooks 6207 Highland Place Way, Suite 203 Knoxville, Tennessee 37919 Attorney for Americas Energy Company
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Desc
To the Board of Directors and Shareholders Americas Energy Company-AECo Knoxville, Tennessee We have audited the accompanying consolidated balance sheets of Americas Energy Company-AECo. (the Company) as of March 31, 2011 and 2010, and the related consolidated statements of operations, statement of stockholders equity and cash flows for the year ended March 31, 2011 and the period from inception (July 13, 2009) through March 31, 2010. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of March 31, 2011 and 2010, and the results of its operations and its cash flows for the year ended March 31, 2011 and for the period from its inception (July 13, 2009) through March 31, 2010, in conformity with accounting principles generally accepted in the United States of America. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has suffered recurring losses and had negative cash flows from operations that raise substantial doubt about the Companys ability to continue as a going concern. Managements plans in regard to these matters are also described in the Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ Weaver & Martin, LLC Weaver & Martin, LLC Kansas City, Missouri July __, 2011
27
Exhibit A
Case 3:11-bk-35466

AMERICAS ENERGY COMPANY - AECo CONSOLIDATED BALANCE SHEETS
Desc
March 31, 2011 ASSETS Current assets Cash Trade receivables Other receivables Prepaid expense Deferred tax asset Total current assets Property, plant, and equipment Less accumulated depreciation Property, plant, and equipment, net Other assets Capitalized mining properties Investment in unconsolidated subsidiary Certificates of deposit - pledged Goodwill Total other assets TOTAL ASSETS $ 2010
10,622 10,000 23,329 43,951 5,811,743 (578,637) 5,233,106
542,331 256,377 103,913 718,150 1,620,771 4,454,133 (6,830) 4,447,303
17,628,588 250,000 1,594,110 742,000 20,214,698 25,491,755 $
29,516,393 100,000 1,580,508 742,000 31,938,901 38,006,975
LIABILITIES AND STOCKHOLDER'S EQUITY Current liabilities Accounts payable Accrued expenses Line of credit Notes payable - related party Current maturities of long-term debt Current portion of capital lease obligations Loans payable Total current liabilities Asset retirement obligations Accrued royalty Deferred tax liability - long-term Long-term portion of capital lease obligations Long-term debt Total long-term liabilities Total liabilities Commitments and contingencies Stockholder's equity Common stock; $0.0001par value; 100,000,000 shares authorized; 81,619,595 issued and outstanding at March 31, 2011 and 70,524,595 shares issued and outstanding on March 31, 2010 Additional paid in capital Retained deficit Total stockholder's equity TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY
466,130 93,051 277,419 70,000 27,699 13,943 1,198,685 2,146,927 1,339,573 7,291,321 18,060 853,764 9,502,718 11,649,646 -
296,013 132,835 859,814 13,091 1,198,685 2,500,438 1,296,674 5,676,000 15,375 31,736 19,140,141 26,159,926 28,660,364 -
8,162 24,836,380 (11,002,432) 13,842,110 $ 25,491,755 $
7,052 19,066,614 (9,727,055) 9,346,611 38,006,975
28
Case 3:11-bk-35466

AMERICAS ENERGY COMPANY - AECo CONSOLIDATED STATEMENT OF OPERATIONS
Desc
For the Year Ended March 31, 2011 REVENUES Coal sales and related income Other income Total revenues OPERATING EXPENSES Cost of sales (exclusive of accretion, depreciation and depletion) Accretion, depreciation and depletion Compensation expense (including stock based in 2011 of $3,688,388 and $200,000 in 2010) Professional fees General and administrative expenses Impairment loss Total operating expenses Loss from operations OTHER INCOME (EXPENSES) Interest income Interest expense Gain on bargain purchase Gain on disposition of asset Gain (loss) on extinguishment of debt Total other income (expenses) INCOME (LOSS) BEFORE INCOME TAXES PROVISION FOR INCOME TAXES (BENEFITS) NET INCOME (LOSS) PER SHARE DATA Basic and diluted income (loss) per common share Basic and diluted weighted average common shares outstanding $ $ 6,787,212 42,730 6,829,942 $
From Inception (July 13, 2009) Through March 31, 2010 3,539,940 38,804 3,578,744
6,020,591 818,006 4,279,551 256,633 624,722 12,525,894 24,525,397 (17,695,455)
3,176,573 33,792 489,665 87,792 195,480 256,522 4,239,824 (661,080)
(1,003,343) 7,927 18,118,269 17,122,853 (572,602) (702,775) (1,275,377) $
(9,284,333) 89,143 (71,830) (9,267,020) (9,928,100) 201,045 (9,727,055)
(0.02) 74,294,127
(0.36) 26,861,911
29
Case 3:11-bk-35466

AMERICAS ENERGY COMPANY, INC. (Formerly Trend Technology Corporation) STATEMENT OF STOCKHOLDERS' EQUITY FROM INCEPTION (JULY 13, 2009) THROUGH MARCH 31 2011
Desc
Common Stock Shares BALANCE - July 13, 2009 (Inception) Founder share issuance Offering costs Recapilazation on reverse acquisition Beneficial conversion features on issuances of convertible debt Discount realized on Warrant grants Conversions of debt to common shares Net loss BALANCE - March 31, 2010 Shares issued for prepaid interest Shares issued for services Shares issued in settlement of debt Shares issued for cancellation of RJCC obligation Shares issued on cancel of convertible debt Compensation recognized on option grants Beneficial conversion features on issuances of convertible debt Net income BALANCE - March 31, 2011 33,000,000 20,524,595 17,000,000 70,524,595 25,000 3,293,298 376,702 5,000,000 2,400,000 $ Amount 3,300 2,052 1,700 7,052 3 330 37 500 240 $ $
Additional Paid-in Capital 196,700 (35,000) 739,948 3,492,515 5,506,737 9,165,714 19,066,614 26,247 3,567,623 58,332 1,167,664 758,426 115,058 70,666 $
Accumulated Deficit (9,727,055) (9,727,055) (1,275,377) $ (11,002,432) $ $
Total Stockholders' Equity 200,000 (35,000) 742,000 3,492,515 5,506,737 9,167,414 (9,727,055) 9,346,611 26,250 3,567,953 58,369 1,168,164 758,666 115,058 70,666 (1,275,377) 13,842,110
81,619,595
8,162
24,836,380
30
Case 3:11-bk-35466

AMERICAS ENERGY COMPANY - AECo CONSOLIDATED STATEMENTS OF CASH FLOWS For the Year Ended March 31, 2011
Desc
July 13, 2009 (Inception) to 2010 $ (9,727,055)
CASH FLOWS FROM OPERATING ACTIVITIES: Net Income (loss) Adjustment to reconcile net income (loss) to net cash provided by (used in) operating activities: Gain (loss) on extinguishment of debt Impairment loss Gain on bargain purchase Gain on disposal of asset Accretion, depreciation and depletion Shares issued for services Options issued for services Shares issued for interest Amortization of discount on convertible debentures Changes in operating assets and liabilities: Decrease in accounts receivable Decrease in prepaid expenses Decrease in other assets Decrease in deferred tax asset Increase in accounts payable Increase in accrued expenses Accrued interest added to principal (Decrease) in deferred tax liability Increase in asset retirement obligation Net cash provided by (used in) operating activities CASH FLOWS FROM INVESTING ACTIVITIES: Investment in certificates of deposit Investment in note receivable Investment in capital stock Purchase of property, plant and equipment Purchase of subsidiary Additions to capitalized mineral properties Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES: Cash received in acquisition of subsidiary Proceeds from line of credit, net Proceeds from convertible debt - related party Proceeds from note payable - related party Payment of obligation under capital lease Payment on note payable Net cash provided by financing activities NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS - beginning of period CASH AND CASH EQUIVALENTS - end of period
(1,275,377)
(18,118,269) 12,525,894 (7,927) 818,006 3,553,330 115,058 63,417 70,666 256,377 80,584 718,150 253,130 273,121 781,647 (15,375) 92,432
71,830 256,522 (89,143) 13,277 200,000 52,691 9,000,000 (256,377) (87,911) (216,420) 296,012 119,131 15,375 20,515 (331,553)
(13,602) (10,000) (150,000) (384,839) (833,461) (1,391,902)
(100,000) (46,656) (7,000,000) (815,997) (7,862,653)
277,419 100,000 570,000 (12,823) (166,835) 767,761 (531,709) 542,331 $ 10,622 $
6,935 9,000,000 (70,398) 8,936,537 742,331 742,331
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Interest paid Income taxes paid
$ $
78,577 -
$ $
39,905 -
Complete 2010 - 10-K is available at: http://yahoo.brand.edgar-online.com/default.aspx?companyid=626644

31
Case 3:11-bk-35466
Item 1 - Financial St atements
Desc
AMERICAS ENERGY C OMP ANY - AECo CONDENSED CONSOLIDATED BALANCE SHEETS
September 30 2011 (Unaudited) ASSETS Current assets Cash Other receivables Prepaid royalties Other prepaid expenses Total current assets Property, plant, and equipment - net Other assets Capitalized mining properties Investment in unconsolidated subsidiary Certificates of deposit - pledged Goodwill Total other assets TOTAL ASSETS $
March 31, 2011
1,885 $ 10,000 32,500 73,392 117,777 4,925,832
10,622 10,000 23,329 43,951 5,233,106
17,738,756 250,000 1,594,110 742,000 20,324,866 25,368,475 $
17,628,588 250,000 1,594,110 742,000 20,214,698 25,491,755
LIABILITIES AND STOCKHOLDER'S EQUITY Current liabilities Accounts payable Accrued expenses Accrued interest Loans payable - related party Line of credit Notes payable - related party Current maturities of long-term debt Current portion of capital lease obligations Loans payable Total current liabilities Long-term liabiities Convertible debenture, net of discount Asset retirement obligations Accrued officers' severance pay Accrued royalty Long-term portion of capital lease obligations Long-term debt, net current maturities Derivative and warrant liabilities
512,394 $ 237,428 78,051 15,000 194,450 50,500 32,101 14,320 1,198,685 2,332,929
466,130 93,051 277,419 70,000 27,699 13,943 1,198,685 2,146,927
846,292 1,036,785 4,867,826 7,443,430 10,834 836,867 311,600
1,339,573 7,291,321 18,060 853,764 -
Case 3:11-bk-35466

15,353,634 17,686,563 -
Desc
Total long-term liabilities Total liabilities Commitments and contingencies
9,502,718 11,649,645 -
Stockholder's equity Common stock; $0.0001par value; 100,000,000 shares authorized; 88,862,983 issued and outstanding at September 30, 2011 8,886 and 81,619,595 shares issued and outstanding on March 31, 2011 Additional paid in capital 27,472,808 Retained deficit (19,799,782) Total stockholder's equity 7,681,912 TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY See accompanying notes. $ 25,368,475 $
8,162 24,836,380 (11,002,432 ) 13,842,110 25,491,755
Case 3:11-bk-35466
Table of Contents
Desc
AMERICAS ENER GY COMPANY - AECo UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended September 30, 2011 2010 REVENUES Coal sales and related income $ Other income Total revenues OPERATING EXPENSES Cost of sales (exclusive of accretion, depreciation and depletion) Accretion, depreciation and depletion Compensation expense Professional fees General and administrative expenses Total operating expenses Loss from operations OTHER INCOME (EXPENSES) Interest income Interest expense Gain on disposition of assets Change in fair value of derivative and warrant liabilities Net gain on modification of acquisition Total other income (expenses) INCOME (LOSS) BEFORE INCOME TAXES PROVISION FOR INCOME TAXES NET INCOME (LOSS) PER SHARE DATA Basic and diluted income (loss) per common share $
For the Six Months Ended September 30, 2011 2010
114,804 $ 114,804
2,142,717 $ 5,126 2,147,843
250,910 $ 5,796 256,706
5,758,537 20,607 5,779,144
174,649 194,982 600,577 89,859 78,465 1,138,532 (1,023,728)
2,822,227 277,510 962,766 189,048 74,925 4,326,476 (2,178,633)
443,141 387,331 7,193,270 282,207 164,839 8,470,788 (8,214,082)
6,017,774 439,176 4,024,452 278,395 257,370 11,017,167 (5,238,023)
3,340 (196,077) 155,496 (37,241)
8,854 (501,129) 4,272 12,763,252 12,275,249
8,782 (287,248) 6,798 (311,600) (583,268)
17,937 (854,635 ) 4,272 12,763,252 11,930,826
(1,060,969)
10,096,616
(8,797,350)
6,692,803
(1,060,969) $
10,096,616 $
(8,797,350) $
(718,150) 5,974,653
(0.01) $
0.14 $
(0.10) $
0.08
Case 3:11-bk-35466

88,852,113 72,257,064 87,133,229
Desc
Weighted average common shares outstanding
71,845,153
See accompanying notes.
Table of Contents
Case 3:11-bk-35466
Desc
AMERICAS ENERGY CO MPA NY - AECo UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS For the Six Months Ended September 30, 2011 2010
CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) Adjustment to reconcile net income (loss) to net cash provided by (used in) operating activities: Accretion, depreciation and depletion Shares issued for services Amortization of discount on convertible debentures Gain on acquisition modification Gain on disposition of assets Change in fair value of derivative and warrant liabilities Changes in operating assets and liabilities: (Increase) in accounts receivable (Increase) in prepaid expenses Decrease in deferred tax asset Increase in accounts payable Increase in accrued expenses Accrued interest expense added to principal Net cash provided (used in) operating activities CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds on sale of assets Purchase of equipment Purchase of building and improvements Coal production costs Loans to unrelated third party Other investment activities Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from convertible debt Proceeds from note payable Proceeds from related party loans Payment on related party loans Payment of obligation under capital lease Payments on accrued royalties payable Payment on credit line Payment on note payable Net cash provided by financing activities NET (DECREASE) IN CASH AND CASH EQUIVALENTS
(8,797,350) $
5,974,653
387,331 1,900,583 159,791 (6,798) 311,600 (82,563) 46,263 5,167,625 78,551 (834,967)
439,176 3,530,638 50,617 (12,763,252 ) (4,272 ) (34,052 ) (39,772 ) 718,150 1,563,233 90,651 640,653 166,423
100,000 (10,000) (653,145) (563,145)
(179,345 ) (47,599 ) (453,265 ) (10,000 ) (265,000 ) (955,209)
1,500,000 45,000 (50,000) (6,849) (86,281) (12,495) 1,389,375 (8,737)
100,000 500,000 (5,763 ) (28,708 ) (13,996 ) 551,533 (237,253)
Case 3:11-bk-35466

10,622 $ 1,885 $
Desc
CASH AND CASH EQUIVALENTS - beginning of period CASH AND CASH EQUIVALENTS - end of period See accompanying notes.
542,331 305,078
Table of Contents
AMERICAS ENERGY COMPANY - AECo CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Interest paid Income taxes paid $ $ 47,768 $ - $ 136,475 -
Complete 2011 Q2 - 10Q is available at: http://yahoo.brand.edgar-online.com/default.aspx?companyid=626644
Case 3:11-bk-35466
Doc 88-2 Filed 01/18/12 Entered 01/18/12 20:35:31 Exhibit B Page 1 of 3

$29,000.00
Desc
AENY-ECC Monthly Operating Budget through May 2012

Evans Coal Payroll Americas Energy Payroll Evans Coal Operating Expenses A - Diaomond Security ADP Payroll Processing Advanced Office Systems (Printer Rental) AT&T (Flatlick Phone Service) Comcast- Ofc Phone & Internet BB&T Bank Costs Business Wire Direct TV Engineering Consulting Services First Utility District Grange Insurance (Building) IPFS Corporation Jonathan Reuben- CPA Justhost Kentucky Utilities KUB Nevada Agency & Transfer Co DTS Financial Publishing RingCentral Swizznet US Cellular Jeffrey Mackay- SEC Counsel Weaver & Martin $7,000.00 $38,657.00 $14,000.00 $20.00 $200.00 $200.00 $50.00 $211.00 $120.00 $320.00 $120.00 $5,000.00 $100.00 $303.00 $6,400.00 $4,000.00 $8.00 $150.00 $600.00 $800.00 $800.00 $60.00 $72.00 $260.00 $1,500.00 $2,000.00 160 hrs x 2 x $20 + taxes 5 x $ 5000 + 2 x $ 2000 + taxes Fuel, Repairs, Reclamation , Security, Porto-John Rentals
$59,657.00
Estimate - To be negotiated
Est'd. D&O, GL, Equipment Insurance
Utilities Flatlick Utilities Knoxville
$23,294.00
IPFS Total Monthly Operating Cost
$3,000.00
$3,000.00 $85,951.00
Workmans Comp
Exhibit B
Case 3:11-bk-35466
Desc
$29,000.00
AENY-ECC Monthly Operating Budget June 2012 through Nov. 2012

Americas Energy Payroll $38,657.00 $38,657.00 A Diamond Security ADP Payroll Processing Advanced Office Systems (Printer Rental) Comcast- Ofc Phone & Internet BB&T Bank Costs Business Wire Direct TV First Utility District IPFS Corporation Jonathan Reuben- CPA Justhost KUB Nevada Agency & Transfer Co DTS Financial Publishing RingCentral Swizznet US Cellular Jeffrey Mackay- SEC Counsel Weaver & Martin $20.00 $200.00 $200.00 $211.00 $20.00 $320.00 $120.00 $100.00 $9,700.00 $4,000.00 $8.00 $300.00 $800.00 $800.00 $60.00 $72.00 $260.00 $1,500.00 $2,000.00 5 x $ 5000 + 2 x $ 2000 + taxes
D&O and GL
Utilities Knoxville
$20,691.00
Office Rent IPFS
$2,000.00 $3,000.00
$5,000.00 $64,348.00
Workmans Comp
Chapter 11 Payments Unsecured Claims Secured Claim- Trucks Priority Wage Claims (6 months) Local Taxing Authorities (6 months) Litigation Class Total Monthly Operating Cost
$40,834.00 $654.00 $23,372.00 $2,659.00 $3,548.00
$71,067.00 $135,415.00
Case 3:11-bk-35466
Desc
$29,000.00
AENY-ECC Monthly Operating Budget Dec 2012 through Dec. 2013

Americas Energy Payroll $38,657.00 $38,657.00 A Diamond Security ADP Payroll Processing Advanced Office Systems (Printer Rental) Comcast- Ofc Phone & Internet BB&T Bank Costs Business Wire Direct TV First Utility District IPFS Corporation Jonathan Reuben- CPA Justhost KUB Nevada Agency & Transfer Co DTS Financial Publishing RingCentral Swizznet US Cellular Jeffrey Mackay- SEC Counsel Weaver & Martin $20.00 $200.00 $200.00 $211.00 $20.00 $320.00 $120.00 $100.00 $9,700.00 $4,000.00 $8.00 $300.00 $800.00 $800.00 $60.00 $72.00 $260.00 $1,500.00 $2,000.00 5 x $ 5000 + 2 x $ 2000 + taxes
D&O and GL
Utilities Knoxville
$20,691.00
Office Rent
$2,000.00
$2,000.00 $61,348.00
Chapter 11 Payments Unsecured Claims Secured Claim- Trucks Litigation Class Total Monthly Operating Cost
$40,834.00 $654.00 $3,548.00
$45,036.00 $106,384.00
Case 3:11-bk-35466
Doc 88-3 Filed 01/18/12 Entered 01/18/12 20:35:31 Exhibit C Page 1 of 7
Desc
AMERICAS ENERGY COMPANY- Exhibit "C" Barbara Evans Secured Claim

Analysis Amount financed Annual interest (e.g., 8.25) Duration of loan (in years) Start date of loan Monthly payments Total number of payments Yearly principal + interest Principal amount Finance charges Total cost $0.00 0.00 0 Yr 1 2 3 4 5 6 7 8 Beg Bal 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Principal 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Class 1
Interest 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Total Pmts
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
New Bal
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
0.00
AGREEMENT OF PAYMENT $ 1,561,609 $0.00 $0.00
CCMT Properties, Inc. Secured Claim

Analysis Amount financed Annual interest (e.g., 8.25) Duration of loan (in years) Start date of loan Monthly payments Total number of payments Yearly principal + interest Principal amount Finance charges Total cost $0.00 Yr 1 2 3 4 5 Beg Bal 0.00 0.00 0.00 0.00 0.00 Principal 0.00 0.00 0.00 0.00 0.00
Class 2
Interest 0.00 0.00 0.00 0.00 0.00
Total Pmts
0.00 0.00 0.00 0.00 0.00
New Bal
0.00 0.00 0.00 0.00 0.00
0.00
AGREEMENT TO RETURN REAL PROPERTY
$0.00 $0.00
Case 3:11-bk-35466
Desc
John Gargis Secured Claim

Analysis Amount financed Annual interest (e.g., 8.25) Duration of loan (in years) Start date of loan Monthly payments Total number of payments Yearly principal + interest Principal amount Finance charges Total cost $0.00 0.00 Yr 1 2 3 4 5 Beg Bal 0.00 0.00 0.00 0.00 0.00 Principal 0.00 0.00 0.00 0.00 0.00
Class 3
Interest 0.00 0.00 0.00 0.00 0.00 Total Pmts 0.00 0.00 0.00 0.00 0.00 New Bal 0.00 0.00 0.00 0.00 0.00
AGREEMENT OF PAYMENT $ 50,000 0.00
$0.00 $0.00
Case 3:11-bk-35466
Desc
Chester Franklin Secured Claim

Analysis Amount financed Annual interest (e.g., 8.25) Duration of loan (in years) Start date of loan Monthly payments Total number of payments Yearly principal + interest Principal amount Finance charges Total cost $34,627.00 6.00 5 4/1/12 $669.44 60 8,033.24 $34,627.00 $5,539.22 $40,166.22 Yr 1 2 3 4 5 Beg Bal 34,627.00 28,374.91 21,802.96 14,894.77 7,633.14
Class 4
Principal Interest 6,252.09 1,589.36 6,571.96 1,269.50 6,908.19 933.26 7,261.63 579.83 7,261.63 208.31 Total Pmts New Bal 7,841.45 28,374.91 7,841.45 21,802.96 7,841.45 14,894.77 7,841.45 7,633.14 7,469.93 371.52
Priority Unsecured Wage Claimants

Analysis Amount financed Annual interest (e.g., 8.25) Duration of loan (in years) Start date of loan Monthly payments Total number of payments Yearly principal + interest Principal amount Finance charges Total cost $135,450.00 6.00 1 4/1/12 $11,657.70 12 139,892.37 $135,450.00 $4,442.37 $139,892.37 Yr 1 Beg Bal 135,450.00
Class 5
Principal Interest 135,450.00 4,442.37 Total Pmts New Bal 139,892.37 0.00
Case 3:11-bk-35466
Desc
IRS Secured Claim

Analysis Amount financed Annual interest (e.g., 8.25) Duration of loan (in years) Start date of loan Monthly payments Total number of payments Yearly principal + interest Principal amount Finance charges Total cost $0.00 0.00 0 Yr 1 2 3 4 5 Beg Bal 0.00 0.00 0.00 0.00 0.00 Principal 0.00 0.00 0.00 0.00 0.00
Class 6
0.00
AGREEMENT OF PAYMENT $ 1,250.00
$0.00
Local Taxing Authorities

Analysis Amount financed Annual interest (e.g., 8.25) Duration of loan (in years) Start date of loan Monthly payments Total number of payments Yearly principal + interest Principal amount Finance charges Total cost $16,665.00 12.00 0.5 4/1/12 $2,875.52 6 34,506.22 $16,665.00 $588.11 $17,253.11 Yr 1 Beg Bal 16,665.00
Class 7
Principal Interest 16,665.00 588.11 Total Pmts New Bal 17,253.11 0.00
Case 3:11-bk-35466
Desc
Priority Unsecured Claims- Kentucky

Analysis Amount financed Annual interest (e.g., 8.25) Duration of loan (in years) Start date of loan Monthly payments Total number of payments Yearly principal + interest Principal amount Finance charges Total cost $0.00 0.00 0 Yr 1 2 3 4 5 Beg Bal 0.00 0.00 0.00 0.00 0.00 Principal 0.00 0.00 0.00 0.00 0.00
Class 8
AGREEMENT OF PAYMENT IN FULL 0.00
$0.00
General Unsecured Claims

Analysis Amount financed Annual interest (e.g., 8.25) Duration of loan (in years) Start date of loan Monthly payments Total number of payments Yearly principal + interest Principal amount Finance charges Total cost $2,161,738.00 6.00 5 4/1/12 $41,792.45 60 501,509.42 $2,161,738.00 $345,809.10 $2,507,547.10 Yr 1 2 3 4 5 Beg Bal 2,161,738.00 1,771,424.85 1,361,142.54 929,869.40 476,531.51
Class 9
Principal Interest 390,313.15 99,222.80 410,282.31 79,253.64 431,273.13 58,262.82 453,337.89 36,198.07 476,531.51 13,004.44 Total Pmts New Bal 489,535.95 1,771,424.85 489,535.95 1,361,142.54 489,535.95 929,869.40 489,535.95 476,531.51 489,535.95 0.00
Case 3:11-bk-35466
Desc
Litigation Class
Analysis Amount financed Annual interest (e.g., 8.25) Duration of loan (in years) Start date of loan Monthly payments Total number of payments Yearly principal + interest Principal amount Finance charges Total cost $188,000.00 5.00 5 1/0/00 $3,547.79 60 42,573.50 $188,000.00 $24,867.52 $212,867.52 Yr 1 2 3 4 5 Beg Bal 188,000.00 154,055.61 118,374.57 80,868.01 41,442.55 Principal 33,944.39 35,681.05 37,506.56 39,425.46 41,442.55
Class 10
Interest 8,629.12 6,892.46 5,066.95 3,148.04 1,130.96 Total Pmts 42,573.50 42,573.50 42,573.50 42,573.50 42,573.50 New Bal 154,055.61 118,374.57 80,868.01 41,442.55 0.00
Case 3:11-bk-35466
Desc
Shareholder Class
$ Analysis Amount financed Annual interest (e.g., 8.25) Duration of loan (in years) Start date of loan Monthly payments Total number of payments Yearly principal + interest Principal amount Finance charges Total cost $0.00 5.00 0 4/1/12 Yr 1 2 3 4 5 Beg Bal 0.00 0.00 0.00 0.00 0.00 Principal 0.00 0.00 0.00 0.00 0.00
Class 11
#VALUE!
#VALUE! #VALUE!
Case 3:11-bk-35466
Doc 88-4 Filed 01/18/12 Entered 01/18/12 20:35:31 Exhibit D Page 1 of 1

Americas Energy Company Evans Coal Corp. Liquidation Analysis
Desc
# 1 2 3 4 5 6 7 8 10 11 12 13 14 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44
ID
YEAR 1993 1993 1997 2001 1993 2005 1996 2006 1990 1988 2006 1991 2001 1976 2005 1996 CAT CAT CAT CAT CAT CAT CAT CAT CAT CAT CAT CAT CAT CAT CAT CAT
MAKE
MODEL 773B 773B 773D 773D 992C 988H 980G 980H D8N D6H D9T D10N D10R 12G 14H IT14G SK300LC DM45E DM45E MTC16 MTC16
CATEGORY
MINING TRUCK MINING TRUCK MINING TRUCK MINING TRUCK WHEEL LOADER WHEEL LOADER WHEEL LOADER WHEEL LOADER TRACK TYPE TRACTOR TRACK TYPE TRACTOR TRACK TYPE TRACTOR TRACK TYPE TRACTOR TRACK TYPE TRACTOR MOTOR GRADER MOTOR GRADER INTEGRATED TOOL CARRIER HYDRAULIC EXCAVATOR DRILL DRILL DOUBLE AUGER STACKING CONVEYER FOR MCT16 TRIPLE AUGER STACKING CONVEYER FOR MCT16 SEA/STORAGE TRAILER POWDER BIN POWDER BIN MISC PARTS & ENGINES
SERIAL NUMBER 63W03862 63W03864 9ER00592 9CS00924 49Z01747 BXY00311 2KR00369 JMS01802 9TC04329 4RC01966 RJS00484 2YD01939 3KR01704 61M04180 ASE01359 1WN00246 YC40758 2615 7279 UNDETERMINED 155M 15 44
METER 21,117
$ VALUE
$ LIQUIDATION
15,580 24,683 4,910 18,766 2,721 23,913 11,184 6,122 26,421 14,607 1,943 8,351 6,493
KOBELCO INGERSOL-RAND INGERSOL-RAND SALEM SALEM
MACK MACK INTERNATIONAL MACK FORD FORD FLEETWOOD INTERNATIONAL FINN MAGNUM MAGNA BLAST
DM600 DM400 444E RD400 F250 F350 4700
POWDER TRUCK POWDER TRUCK SERVICE TRUCK FUEL TRUCK SCALES - 2 sets P/U TRUCK P/U TRUCK OFFICE TRAILER MECHANIC TRUCK HYDROSEEDER COAL STOKER PLANT
M2P131C8BC008988 7875 495 140,000
N/A 20272 45360706G SUB TOTAL
6" DIESEL
WATER PUMP PRESSURE WASHER
75,000 75,000 225,000 120,000 90,000 450,000 40,000 125,000 75,000 35,000 375,000 85,000 350,000 30,000 250,000 65,000 35,000 85,000 45,000 390,000 10,000 240,000 10,000 1,500 20,000 20,000 25,000 35,000 30,000 35,000 12,000 30,000 6,000 6,000 1,500 35,000 1,500 30,000 15,000 6,500 3,590,000
20,000 20,000 75,000 40,000 30,000 175,000 10,000 35,000 25,000 5,000 175,000 25,000 150,000 7,500 75,000 25,000 15,000 35,000 20,000 125,000 2,500 80,000 2,500 500 5,000 5,000 5,000 7,500 7,500 7,500 5,000 5,000 4,000 4,000 1,500 7,500 500 5,000 5,000 1,500 1,249,500
Job Hwy 92 Artemus-Surface Artemus- Deep Mines Cardinal Deep Mines Cardinal- Surface
Old# 807-0329 861-5340 861-5340 807-5190 807-0343
New# 807-0385 861-5348 861-5348 807-5227 807-0381
SFN# 184242-4* 18673-8* 18767-1* 18673-8* 18767-1* 18242-2* 18242-5*
County Bell/Knox Knox Knox Bell Bell
Nearest Town Flat Lick Artemus Artemus Blackmont Blackmont
Coal Seam ('s) Dean, Rooster, Upper Rooster Jellico, Lily, Blue Gem Jellico & Lily Kellioka & Darby Hance
250,000 50,000 1,000,000 1,000,000 250,000 2,550,000 6,140,000
50,000 5,000 250,000 250,000 25,000 580,000 1,829,500
SUB TOTAL TOTAL
Exhibit D
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Doc 88-5 Filed 01/18/12 Entered 01/18/12 20:35:31 Exhibit E Page 1 of 18
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IN THE UNITED STATES BANKRUPTCY COURT FOR THE EASTERN DISTRICT OF TENNESSEE NORTHERN DIVISION KNOXVILLE IN RE: AMERICAS ENERGY COMPANY, Debtor.
CASE NO. 11-35468 11-35466 (Chapter 11)
PLAN OF REORGANIZATION PROPOSED BY DEBTOR
JAMES R. MOORE MOORE & BROOKS 6207 HIGHLAND PLACE WAY, STE. 203 KNOXVILLE, TENNESSEE 37919 ATTORNEY FOR DEBTOR DATED: JANUARY 18, 2012
Exhibit E
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TABLE OF CONTENTS ARTICLE 1 ARTICLE 2 ARTICLE 3 ARTICLE 4 ARTICLE 5 ARTICLE 6 ARTICLE 7 ARTICLE 8 ARTICLE 9 Introduction Definitions Classification of Claims Provision for Payment of Administrative Expenses (Unclassed) Provisions for Treatment of Secured Claim Held by Barbara Evans Provisions for Treatment of Secured Claim Held by CCMT Properties, Inc. Provisions for Treatment of Secured Claim Held by John Gargis Provisions for Treatment of Secured Claim Held by Chester Franklin Provisions for Treatment of Priority Unsecured Claims Held by Wages Claimants
ARTICLE 10 Provisions for Treatment of Priority Unsecured Claim Held by IRS ARTICLE 11 Provisions for Treatment of Priority Unsecured Claims Held by Taxing Authorities ARTICLE 12 Provisions for Treatment of Priority Unsecured Claims Held by State Agencies ARTICLE 13 Provisions for Treatment of Claims Held by General Unsecured Creditors ARTICLE 14 Provisions for Treatment of General Unsecured Litigation Claims ARTICLE 15 Provisions for Treatments of Shareholder Class ARTICLE 16 Cramdown of Plan ARTICLE 17 Means for Execution of the Plan ARTICLE 18 Procedures for Treatment of Disputed Claims ARTICLE 19 Acceptance or Rejection of Plan: Effect of Rejection by One or More Classes of Claims ARTICLE 20 Identification of Claims Impaired and Not Impaired by the Plan
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ARTICLE 21 Executory Contracts and Unexpired Leases ARTICLE 22 Provisions Covering Distributions ARTICLE 23 Procedures for Resolving Disputed Claims ARTICLE 24 Trustee and Committees ARTICLE 25 Provision for Execution and Supervision of the Plan ARTICLE 26 Provisions for Management ARTICLE 27 Events of Default ARTICLE 28 Additional Default Provisions ARTICLE 29 Miscellaneous Provisions ARTICLE 30 Payment of United States Trustee Quarterly Fees and Submission of Statements of Disbursements
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ARTICLE 1. INTRODUCTION THIS PLAN OF REORGANIZATION (the Plan) is proposed by AMERICAS ENERGY COMPANY, (hereinafter referred to as Debtor or AENY unless otherwise specified) pursuant to Section 1121(a), title 11, United States Code, for the resolution of Debtors outstanding creditor claims. ARTICLE 2. DEFINITIONS As used in the Plan, the following terms shall have the respective meanings specified below: 2.1. 2.2. Administration Claimant: Any person entitled to payment of an Administration Expense. Administration Expense: Any cost or expense of administration of the chapter 11 case entitled to priority under Section 507(a)(1) and allowed under Section 503(b) of the Code, including without limitation, any actual and necessary expenses of preserving the Debtors estate, and actual and necessary expenses incurred post-petition by the Debtor, any indebtedness or obligations incurred by or assessed against the Debtor, or for the acquisition or lease of property or for providing of services to the Debtor, and allowances of compensation or reimbursement of expenses to the extent allowed by the Bankruptcy Court under the Bankruptcy Code, and any fees or charges assessed against any of the Debtors estates under Chapter 123, Title 28, United States Code. Allowed Claim: Any claim against the Debtor, proof of which was filed on or before the last date designated by the Bankruptcy Court as the last date for filing proofs of claims, if no proof of claim is filed which has been or hereafter is listed by the Debtor as liquidated in amount and not disputed or contingent and, in either case, a Claim as to which no objection to the allowance thereof has been interposed or such Claim has been allowed in whole or in part by a Final Order. Unless otherwise specified in the Plan, Allowed Claim shall not, for the purposes of computation or Distributions under the Plan, include post-petition interest on the amount of such Claim. Allowed Priority Tax Claim: A Priority Tax Claim to the extent that it is or has become an Allowed Claim, which in any event shall be reduced by the amount of any offsets, credits, or refunds to which the Debtor or Debtor-in-Possession shall be entitled on the Confirmation Date. Allowed Secured Claim: A Secured Claim to the extent that it is or has become an Allowed Claim, which in any event shall be reduced by the amount of any offsets, credits, or refunds to which the Debtor or Debtor-in-Possession shall be entitled on the Confirmation Date. Allowed Unsecured Claim: An Unsecured Claim to the extent it is, or has become, an Allowed Claim, which in any event shall be reduced by the amount of any offsets, credits, or refunds to which the Debtor or Debtor-in-Possession shall be entitled on the Confirmation Date.
2.3.
2.4.
2.5.
2.6.
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2.7.
Bankruptcy Code: The Bankruptcy Reform Act of 1978, as amended and codified as Title 11, United States Code. Bankruptcy Court: The unit of the United States District Court for the Eastern District of Tennessee, Northern Division Knoxville, having jurisdiction over the chapter 11 case, or in the event such court ceases to exercise jurisdiction over the chapter 11 case, such court or adjunct thereof that exercises jurisdiction over this chapter 11 case in lieu of the United States Bankruptcy Court for the Eastern District of Tennessee. Bankruptcy Rules: The Rules of Bankruptcy Procedure as amended, as applicable to the chapter 11 case. Cash: Cash, cash equivalents and other readily marketable securities or instruments issued by a person other than the Debtor, including, without limitation, readily marketable direct obligations of the United States of America, certificates of deposit issued by banks and commercial paper of any entity, including interest accrued or earned thereon. Chapter 11 Case: This cases under chapter 11 of the United States Bankruptcy Code in which Americas Energy Company is the Debtor. Claim: Any right to payment from the Debtor whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured; or any right to an equitable remedy for future performance if such breach gives rise to a right of payment from the Debtor, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, disputed, undisputed, secured or unsecured. Committee: Any Committee of Creditors appointed by the United States Trustee in the chapter 11 case pursuant to Section 1102 of the Bankruptcy Code. Confirmation Date: The Date upon which the Bankruptcy Court shall enter the Confirmation Order; provided however, that if on motion the Confirmation Order or consummation of the Plan is stayed pending appeal, then the Confirmation Date shall be the entry of the Final Order vacating such stay or the date on which such stay expires and is no longer in effect. Confirmation Order: An order of the Bankruptcy Court or any amendment thereto confirming the Plan in accordance with the provisions of chapter 11 of the Bankruptcy Code. Creditor: Any person that has a Claim against the Debtor that arose on or before the Petition Date. Debtor: Americas Energy Company, the Debtor under this chapter 11 case. Distributions: The property required by the Plan to be distributed to the holders of Allowed Claims.
2.8.
2.9.
2.10.
2.11.
2.12.
2.13.
2.14.
2.15.
2.16.
2.17. 2.18.
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2.19. 2.20.
Effective Date: The first day of the month following ten days after the Confirmation Date. Final Order: An order or judgment of the Bankruptcy Court which has not been reversed, stayed, modified or amended and as to which (a) any appeal that has been taken has been finally determined or dismissed, or (b) the time for appeal has expired and no notice of appeal has been filed. Petition Date: December 7, 2010, the date the chapter 11 petition for relief was filed. Plan: This Plan of Reorganization, either in its present form or as it may be altered, amended, or modified from time to time. Priority Non-Tax Claim: Any claim other than Administrative Expense or a Priority Tax Claim to the extent entitled to priority and payment under Section 507(a) of the Bankruptcy Code. Priority Tax Claim: Any Claim entitled to priority in payment under Section 507(a)(8) of the Bankruptcy Code. Schedules: Schedules and Statement of Affairs, as amended, filed by the Debtor with the Bankruptcy Court listing liabilities and assets. Unsecured Creditor: Any Creditor that holds a Claim which is not a Secured Claim. ARTICLE 3. CLASSIFICATION OF CLAIMS Claims are classified as follows:
2.21. 2.22.
2.23.
2.24.
2.25.
2.26.
3.1. 3.2 3.3 3.4 3.6. 3.7 3.8 3.9
Class 1 Secured Claim held by Barbara Evans. Class 2 Secured Claim held by CCMT Properties, Inc. Class 3 Secured Claim held by John Gargis Class 5 Secured Claim held by Chester Franklin. Class 6 Priority Unsecured Claim for Wages. Class 7 Priority Unsecured Claim for IRS taxes Class 8 Priority Unsecured Claim held by Taxing Authorities. Class 9 Priority Unsecured Claim held by State Agencies.
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3.10 3.11 3.12
Class 10 General Unsecured Claims Class 11 General Unsecured Claim held in Litigation Class Class 12 Shareholders ARTICLE 4. PROVISIONS FOR PAYMENT OF ADMINISTRATION EXPENSES CLAIM AND PAYMENT OF OTHER PROFESSIONALS (UNCLASSED)
4.1.
100% Payment. On the Effective Date, each Allowed Administration Expense Claim shall be paid in full in Cash or upon such other terms as may be agreed upon by and between any Administration Claimant and the Debtor. All professional rendering services during the period the chapter 11 trustee was serving shall be paid all fees and expenses on the Effective Date as might be approved by the Court. Bar Date for Fee Claim. The Confirmation Order shall provide a bar date for filing of claims by those entities asserting claims for compensation under Sections 330 and/or 503 of the Bankruptcy Code. ARTICLE 5. PROVISIONS FOR TREATMENT OF SECURED CLAIMS HELD BY BARBARA EVANS AGAINST THE DEBTOR (CLASS 1)
4.2.
4.3.
5.1.
Class 1 is comprised of the secured lien claim held by Barbara Evans in the amount of $1,561,609. The claim of is fully secured by a first lien position in all but one of Debtors coal leases and all but two pieces of coal mining equipment. The debt was created as a result of the sale of Evans Coal Corp., to AENY. AENY proposes to pay said claim as follows: The Debtor anticipates that prior to confirmation of the plan of reorganization that all of the assets pledged to Barbara Evans will be sold pursuant to Court authority, and that all secured claims against those assets will be paid at the conclusion of the sale, thus the treatment in this Class would be mooted. Should the sale not be conducted until after the plan is confirmed, the Debtor proposes to conduct the sale pursuant to the terms of the plan and pay all secured claims against those assets at the conclusion of the sale. As stated above, if the sale is conducted before the confirmation of the plan, the claim holder would not be impaired and this class is mooted. If the proposed sale is not conducted until after the plan is confirmed, the holder of the Class 1 claim is impaired and therefore is eligible to vote on the Plan.
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ARTICLE 6. PROVISIONS FOR TREATMENT OF SECURED CLAIMS HELD BY CCMT PROPERTIES, INC., AGAINST THE DEBTOR (CLASS 2) 6.1. Class 2 is comprised of the secured claim held by CCMT Properties, Inc., for the office building used by the Debtor for its headquarters and pledged to the mortgagee by the Debtor. The claim will be satisfied in full as follows: The Debtor will return the building to the secured creditor either six months from the date of entry of an agreed Order lifting the automatic stay or, (ii) thirty days following receipt of written notice the property is being sold or leased. The holder of the Class 2 claim is impaired and therefore is eligible to vote on the Plan. ARTICLE 7. PROVISION FOR THE TREATMENT OF SECURED CLAIM HELD BY JOHN GARGIS AGAINST THE DEBTOR (CLASS 3) 7.1 Class 3 is comprised of the secured claim of John Gargis in the amount of $50,000. The claim of is fully secured by a first lien position in one of Debtors leases identified as the Hammons Lease. The debt was created as a result of a loan made to AENY by Gargis for business operations. AENY proposes to pay said claim as follows: The Debtor anticipates that prior to confirmation of the plan of reorganization that the asset pledged to John Gargis will be sold pursuant to Court authority, and that the secured claim against that asset will be paid at the conclusion of the sale, thus the treatment in this Class would be mooted. Should the sale not be conducted until after the plan is confirmed, the Debtor proposes to conduct the sale pursuant to the terms of the plan and pay all secured claims against all assets at the conclusion of the sale. As stated above, if the sale is conducted before the confirmation of the plan, the claim holder would not be impaired and this class is mooted. If the proposed sale is not conducted until after the plan is confirmed, the holder of the Class 3 claim is impaired and therefore is eligible to vote on the Plan.
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ARTICLE 8. PROVISIONS FOR TREATMENT OF SECURED CLAIMS HELD BY CHESTER FRANKLIN AGAINST THE DEBTOR (CLASS 4) 8.1 Class 4 is comprised of the secured claims totaling $34,627 held by Chester Franklin for two pickup trucks he financed for the Debtor. The claims will be paid in full and in cash as follows: Beginning on the Effective Date the Debtor will make regular payments of $669/month over a period of five years at 6% interest. The holder of the Class 4 claims is impaired and therefore eligible to vote on the Plan. ARTICLE 9. PROVISIONS FOR TREATMENT OF PRIORITY UNSECURED CLAIMS HELD BY WAGE CLAIMANTS AGAINST THE DEBTOR (CLASS 5) 9.1 Class 5 is comprised of the priority unsecured claims totaling $135,450 held by various employees. The claim will be paid in full and in cash as follows: Beginning on the Effective Date the Debtor will make regular payments of $11,657.70 /month on a pro rata basis to wage claimants over a period of one year at 6% interest. The holders of the Class 5 claims are impaired and therefore eligible to vote on the Plan. ARTICLE 10. PROVISIONS FOR TREATMENT OF PRIORITY UNSECURED CLAIM HELD BY IRS AGAINST THE DEBTOR (CLASS 6) 10.1 Class 6 is comprised of the priority unsecured claims totaling $1,250 held by the Internal Revenue Service. The claim will be paid in full and in cash as follows: On the Effective Date the Debtor will pay the claim in full. The holder of the Class 6 claim is not impaired and therefore not eligible to vote on the Plan.
ARTICLE 11. PROVISIONS FOR TREATMENT
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OF PRIORITY UNSECURED CLAIMS HELD BY TAXING AUTHORITIES AGAINST THE DEBTOR (CLASS 7) 11.1 Class 7 is comprised of the priority unsecured claims totaling $16,665 held by two taxing authorities for property taxes on property located in Knoxville, Tennessee. The claims will be paid in full and in cash as follows: Beginning on the Effective Date the Debtor will make regular payments of $2,874/month on a pro rata basis to the taxing authorities claimants over a period of six months at 12% interest. The holders of the Class 7 claims are impaired and therefore are eligible to vote on the Plan. ARTICLE 12. PROVISIONS FOR TREATMENT OF PRIORITY UNSECURED CLAIMS HELD BY STATE AGENCIES AGAINST THE DEBTOR (CLASS 8) 12.1 Class 8 is comprised of the priority unsecured claims in amount to be determined held by the Commonwealth of Kentucky for liquidated and proposed, unliquidated assessments for alleged violations of various environmental laws. The claims will be paid in full and in cash as follows: The Debtor anticipates that prior to confirmation of the plan of reorganization that most of the coal mining leases in the Commonwealth of Kentucky will be sold pursuant to Court authority, and that all claims will be paid at the conclusion of the sale, thus the treatment in this Class would mooted. Should the sale not be conducted until after the plan is confirmed, the Debtor proposes to conduct the sale pursuant to the terms of the plan and pay all secured claims against those assets at the conclusion of the sale. As stated above, if the sale is conducted before the confirmation of the plan, the claim holder would not be impaired and this class is mooted. If the proposed sale is not conducted until after the plan is confirmed, the holder of the Class 8 claim is impaired and therefore is eligible to vote on the Plan.
ARTICLE 13. PROVISIONS FOR TREATMENT
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OF GENERAL UNSECURED CLAIMS HELD AGAINST THE DEBTOR (CLASS 9) 13.1 Class 9 is comprised of the general unsecured claims held by creditors which the Debtor estimates is a total of $2,161,738. The claims will be paid in cash as follows: Beginning on the Effective Date the Debtor will make regular payments of $40,795/month paid pro rata to the various claim holders for a period of five years with interest at a rate of 5% per annum. The holders of the Class 9 claims are impaired and are eligible to vote on the Plan. ARTICLE 14. PROVISIONS FOR TREATMENT OF LITIGATION CLASS (CLASS 10) 14.1. Class 10 is comprised of the disputed claim held by Prestige Processing, Inc., as a result of a lawsuit for damages that was pending at the time the petition for relief was filed. The Debtor anticipates filing an objection to claim before confirmation of the plan. Further, the Debtor contends that the claim is not liable for any damages. If the Debtor is found to be liable on this claim, the claim as it may ultimately be determined will be paid in cash as follows: Beginning on the Effective Date the Debtor will make regular payments to be paid to over a period of ten years at 5% interest per annum. The holder of the Class 10 claim is impaired and is eligible to vote on the Plan. ARTICLE 15. PROVISION FOR TREATMENT OF SHAREHOLDER CLASS 15.1 Class 11 is comprised of all the Debtors shareholders and holders of warrants. Beginning on the Effective Date and for a period not to exceed thirty days, all shareholders will be issued one new share in the reorganized debtor for each twenty shares returned to the designated transfer agent. All current shareholders must provide proof of identity and address to be entitled to receive new shares and must bear the expenses for the services of the transfer agent. The thirty day period allowed for shareholders to exchange their shares will expire at 5 p.m., Eastern Standard Time, on the thirtieth day. All warrants will be canceled on the Effective Date. ARTICLE 16. CRAMDOWN OF PLAN
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16.1
In the event that one or more classes of impaired claims does not approve the Plan by the requisite vote, the Debtor shall seek confirmation of the Plan pursuant to the provisions of Section 1129(b) of the Bankruptcy Code. ARTICLE 17. MEANS FOR EXECUTION OF THE PLAN
17.1
The Debtor is proposing to pay in full all Claims in all Classes either from income generated from the sale of essentially all of its equipment and coal leases held by its wholly owned subsidiary, Evans Coal Corp. (ECC), in Kentucky, or from future operations from tow coal leases it proposes to retain and from other business ventures that the Debtor is currently contemplating. The Debtor would represent that the income from the sale of the assets owned by ECC are more than sufficient to pay all secured and unsecured claims immediately after the completion of the sale, it nevertheless is proposing to retain all proceeds after paying all underlying secured claims, use the funds for other business opportunities and pay the general unsecured claims over various periods of up to ten years. The Debtor will propose to keep two coal leases that the Debtor anticipates will generate sufficient income to pay all unsecured creditors over a period of up to five years for most classes and for ten years to the Litigation Class. Projections for the proceeds of the sale of the leases and equipment are attached as Exhibits to the Disclosure Statement. Projections of the income from the operation of what it proposes will be the one of the coal leases it is proposing to keep is also attached as an Exhibit to the Disclosure Statement. ARTICLE 18. PROVISIONS FOR TREATMENT OF DISPUTED CLAIMS
18.1
Debtor and any party in interest shall have the authority to object to and contest the allowance of any Claims filed with the Bankruptcy Court in respect of any Claims listed as disputed, contingent or unliquidated on the Debtors Schedules, except claims otherwise treated by the Plan or previously allowed or disallowed by Final Order of the Bankruptcy Court. If the Plan provides for any payment under the Plan, all allowed Claims will be paid pursuant to the applicable terms. ARTICLE 19. EFFECT OF ACCEPTANCE OR REJECTION OF PLAN BY ONE OR MORE CLASSES OF CLAIMS
18.2
19.1
Impaired Classes to Vote. Each impaired class of Creditors with Claims against any of the Debtors estate shall be entitled to vote separately to accept or reject the Plan.
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19.2
Any member of a class that is proposed to receive nothing under the Plan is deemed to have rejected the Plan is not permitted to vote on the Plan. Acceptance by Class of Creditors. A Class of Creditors shall have accepted the Plan if the Plan is accepted by at least 2/3 in amount and more than 1/2 in number of the Allowed Claims of such class that have accepted or rejected the Plan. Cramdown. In the event that any impaired class of Creditors with Claims against any of the Debtors estate fails to accept the Plan in accordance with Section 1129(a) of the Bankruptcy Code, the Debtor shall request the Bankruptcy Court to confirm the Plan in accordance with Section 1129(b) of the Bankruptcy Code. ARTICLE 20. IDENTIFICATION OF CLAIMS NOT IMPAIRED OR IMPAIRED BY THE PLAN
19.3
19.4.
20.1
Unimpaired Classes. All Classes are impaired under the Plan except for Classes 6, 7 and 11. Class 11 is the shareholder class. Impaired Classes to Vote on Plan. The Claims in Classes specified in Classes 1, 2, 3, 4, 5, 8, 9 and 10 of the Plan are impaired and therefore entitled to accept or reject the Plan. A class of claims is impaired when a plan does not leave unaltered the legal, equitable, and contractual rights to a claim. Shareholder interests are also impaired when their legal and equitable interests are not left unaltered. Controversy Concerning Impairment. In the event of a controversy as to whether any Creditors or class of Creditors are impaired under the Plan, the Bankruptcy Court shall, after notice and a hearing, determine such controversy. ARTICLE 21. EXECUTORY CONTRACTS AND UNEXPIRED LEASES
20.2
20.3
20.4
21.1
Assumption of Executory Contracts Under the Primary Plan. In the event of the Confirmation of the Plan, any executory contracts or unexpired leases not rejected by the Debtor with the Bankruptcy Court prior to the Confirmation Date or which are not the subject of a motion to reject the same pending as of the Confirmation Date shall be deemed to have been assumed by the Debtor upon the Confirmation Date, in accordance with Section 365 of the Bankruptcy Code.
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ARTICLE 22. PROVISIONS COVERING DISTRIBUTIONS 22.1 Payments Made On The Effective Date. Payments to be made by the Debtor shall be made beginning on the Effective Date, or as may be ordered by the Bankruptcy Court. Method of Payment. Payments to be made by the Debtor pursuant to the Plan shall be made from proceeds for the sale of Debtors assets with a check drawn on a domestic bank or by wire transfer from a domestic bank. Payment to be Made by the Debtor. Distributions to be made to Creditors under the Plan shall be made by Americas Energy Company. ARTICLE 23. PROCEDURES FOR RESOLVING DISPUTED CLAIMS 23.1 Bar Date for Objections to Claims. Unless otherwise ordered by the Court, after notice and a hearing, objections to Claims shall be made and filed by the Debtor or any party in interest and shall be served upon each holder of each of the Claims to which objections are made (and upon the Debtors attorney if the Debtor is not the objecting party) and filed with the Bankruptcy Court as soon as practicable, but in no event later than 90 days subsequent to the Effective Date. Prosecution of Objections to Claims. The objecting party shall litigate to judgment, settle or withdraw objections to Disputed Claims. ARTICLE 24. TRUSTEE AND COMMITTEES 24.1 Trustee. On the Confirmation Date, if the chapter 11 trustee is still serving, his postion shall be terminated. Committees. All Committees then in existence, if any, shall terminate. ARTICLE 25. PROVISIONS FOR EXECUTION AND SUPERVISION OF THE PLAN 25.1 Retention of Jurisdiction. The Bankruptcy Court shall retain and have exclusive jurisdiction over the chapter 11 case for the following purposes: a b. determine any and all objections to the allowance of Claims; to determine any and all pending applications for the rejection or assumption of executory contracts or unexpired leases to which the Debtor is a party or with respect
22.2
22.3
23.2
24.2
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to which any may be liable, and to hear and determine, and if need be to liquidate, any and all Claims arising therefrom; c. to determine any and all applications, adversary proceedings and contested or litigated matters that may be pending on the Confirmation Date, except as provided in the Confirmation Order; to consider any modifications of the Plan, any defect or omission or reconcile any inconsistency in any order of the Bankruptcy Court, including the Confirmation Order, to the extent authorized by the Bankruptcy Code; to determine all controversies, suits and disputes that may arise in connection with the interpretation, enforcement or consummation of the Plan, to include disputes between classes of claimants under the Plan regarding allocations or payment of Distribution hereunder; to consider and act on the compromise and settlement of any claim against or cause of action by or against the Debtors estate; to issue such orders in aid of execution of the Plan to the extent authorized by Section 1142 of the Bankruptcy Code; and to determine such other matters which may be set forth in the Confirmation Order or which may arise in connection with the Plan or the Confirmation Order, including, but not limited to, extending deadlines and time limits provided in the Plan.
d.
e.
f.
g.
h.
25.2
Amendment of Plan. The Plan may be amended by the Debtor before or after the Confirmation Date as provided in Section 1127 of the Bankruptcy Code. ARTICLE 26. PROVISIONS FOR MANAGEMENT
26.1
Debtor is a publicly traded corporation. The Debtor, whose management has been responsible for all the business functions of ECC, is proposing the following management of officers and board members after the plan is confirmed: Directors Ron Scott, Executive, Chairman Christopher L. Headrick Additional board members to be announced later
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Executive Officers Christopher l. Headrick, President and Chief Executive Officer John W. Gargis, Executive Vice President Hong Duan, Ph.D., Chief Financial Officer Jesse Blanco, Corporate Secretary 26.2 Compensation. The offices will be paid salaries as follows: Christopher l. Headrick $15,000/month John W. Gargis, $10,000/month Hong Duan, Ph.D., $10,000/month Ron Scott, $10,000/month Jesse Blanco, $10,000/month New employment agreements will be issued. ARTICLE 27. EVENTS OF DEFAULT 27.1 In the event that the Debtor defaults under the provisions of the Plan (as opposed to a default under documentation executed in implementing the terms of the Plan, which documents shall provide independent bases for relief), any creditor or party in interest desiring to assert such a default shall provide the Debtor with written notice of the alleged default. The Debtor shall have 30 days from receipt of the written notice in which to cure the default. Such notice shall be delivered by certified mail, return receipt requested to the attorney for the Debtor at the address stated on the final page hereof. If the default is not cured, any creditor or party in interest may thereafter file and serve upon attorney for the Debtor a motion to compel compliance with applicable provisions of the Plan. The Bankruptcy Court, upon finding a material default, shall issue such orders compelling compliance with the pertinent provisions of the Plan. Alternatively, creditors may resort to applicable non bankruptcy law upon default and failure to cure by the Debtor. ARTICLE 28. ADDITIONAL DEFAULT PROVISIONS 28.1 A failure by the Debtor to make a payment to the IRS pursuant to the terms of the plan shall be an event of default; as to the IRS, there is an event of default if payment is not received by the 15th each month; if there is a default as to the IRS, IRS must send written demand for payment to the Debtor and said payment must be received by the IRS within fifteen (15) days of the date of the demand letter; the Debtor can receive up to five (5) notice of default
27.2
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from the IRS, the fifth (5th) default cannot be cured and the IRS may accelerate its allowed claim(s), past and future, and declare the outstanding amount of such claim(s) to be immediately due and owing and pursue any and all available state and federal rights and remedies. These default provisions pertain to the entire claim(s) of the IRS, secured, unsecured priority and unsecured general. 28.2 The IRS is bound by provisions of the confirmed plan and is barred under 11 U.S.C. 1141 from taking any collection action against the Debtor for pre-petition claims during the duration of the plan (provided there is no default as to the IRS). The period of limitations of collection remains suspended under 26 U.S.C. 6503(h) for tax periods being paid under the plan and terminates on the earlier of (1) all required payments to the IRS having been made; or (2) 30 days after the date of the demand letter (described above) for which the Debtor failed to cure the default. ARTICLE 29. MISCELLANEOUS PROVISIONS 29.1 Discharge of Debtor. All Claims are proposed to be paid in full thus the Debtor does not anticipate to need a discharge under this Plan. Title to Assets; Discharge of Liabilities. Except as otherwise provided by the Plan, on the Confirmation Date, title to all assets and properties dealt with by the Plan shall vest in the Debtor, as the case may be, in accordance with Section 1141 of the Bankruptcy Code, free and clear of all Claims other than those noted. Section Headings. The section headings contained in the Plan are for reference purposes only and shall not affect in any way the meaning or interpretation of the Plan. ARTICLE 30. PAYMENT OF UNITED STATES TRUSTEE QUARTERLY FEES AND SUBMISSION OF STATEMENTS OF DISBURSEMENTS 30.1 The Debtor shall timely pay on the Effective Date all pre-confirmation quarterly fees owed to the United States Trustee. The Reorganized Debtor also shall timely pay postconfirmation quarterly fees assesses pursuant to 28 U.S.C. 1930(a)(6) until such time as the Bankruptcy Court enters a final decree closing these chapter 11 cases, or enters an order either converting these cases to cases under chapter 7 or dismissing the cases. After confirmation, the Reorganized Debtor shall file with the Bankruptcy Court and shall transmit to the United States Trustee a true and correct statement of all disbursements for each quarter, or portion thereof, that these chapter 11 cases remain open in a format prescribed by the United States Trustee.
29.2
29.3.
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AMERICAS ENERGY COMPANY /S/ Chris Headrick ___________________________________ BY: Chris Headrick, President /s/ James R. Moore ____________________________________ James R. Moore Moore & Brooks 6207 Highland Place Way, Suite 203 Knoxville, Tennessee 37919

AENYQ Disclosure Statement /POR

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Case 3:11-bk-35466

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CASE NO. 11-35466 11-35468 (Chapter 11)

DISCLOSURE STATEMENT PROPOSED BY DEBTOR

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Acceptances Necessary to Confirm the Plan of Reorganization. . . . . . . . 10 Cramdown. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

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(k) (l) (m) E.

ALTERNATIVES TO PLAN OF REORGANIZATION AND LIQUIDATION ANALYSIS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 A. Dismissal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

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B. C. X. XI. XII. XIII.

Chapter 7 Liquidation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Alternative Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

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Classes Impaired Under the Plan

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Confirmation of Plan 1. Solicitation of Acceptances

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Summary of All Classes and Their Treatment

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Significant Orders Entered During the Case 1. Initial Activity

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Application to Retain Professionals

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Executory Contracts and Leases

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Termination of Trustee and Committees

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Risks Associated with the Plan

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