Linc Energy has filed for Chapter 11 bankruptcy for it’s US oil and gas business.
The company filed voluntary petitions for relief for each of it’s subsidiaries under Chapter 11 of the United States Bankruptcy Code on Sunday.
According to The Australian, Linc USA said if it can’t start drawing on $US10 million in bankruptcy financing, it won’t be able to make payroll or cover other operating costs, threatening the value of the assets it hopes to sell.
Chapter 11 bankruptcy protection allows the debtor to propose a plan of reorganisation to pay creditors over time and keep its business alive.
In April, Linc Energy was placed into voluntary administration, before being placed into liquidation on May 23.
The company has been under fire for environmental contamination at it’s Underground Coal Gasification plant in Chinchilla, which resulted in a UCG ban in Queensland.
The current slump in coal prices saw US mining giant Peabody Energy also file for bankruptcy protection in April this year.