The Trend Continues: Mining Business Latest Company to File Bankruptcy
The Copper King Mining Corporation, based in Utah and only in business for one year, has recently let go their employees and field for Chapter 11 bankruptcy. Only a year ago, the mining company introduced a $60+ million mill, but quickly ran out of funds. At the company’s filing it was openly admitted Copper King is unable to pay its workers, lawyers and mining leases. During a company meeting on May 13th, the board voted to declare bankruptcy.
Board Chairman, David McMullin, is currently looking for ways to pay back wages owed to many workers. Some contractors have yet to receive payment as well and some speculate shareholders will get hit the hardest. Copper King encountered numerous money issues from the start and early on, ran into operational woes which prevented them from reaching their full potential.
In an effort to raise more money, Copper King issued billions of shares. And while it seems the company itself has basically been built upon the support of shareholders, the best they can do is wait and try to bounce back amidst their bankruptcy protection and time of reorganization.
Like so many other failing companies these days, who file for bankruptcy protection, the mining company’s beginning planning stages and budgets, were never up to par with the velocity with which most businesses travel. Because so many resources and funding went into the establishment of the mill itself, the basic components of the up-start were lost. With only 85 employees, it became a task unto itself just to pay them, as work dwindled.
Copper King is not alone and in most cases, filing for bankruptcy protection is just what the doctor ordered for businesses that need to focus and restructure. The company controlled iron ore as well as copper deposits, on roughly 60,000+ acres of leased land in Utah.