Creditors face losing thousands following collapse of UK Coal

However, some local businesses who were owed money following the collapse of the company that ran the mines are facing a deficit running into thousands of pounds.

They include Donna Smith, of Selby-based Flowclean Services, who claims that some firms are facing “serious financial problems”.

She believes the company which has emerged from the collapse of UK Coal should pay back all the money it owed.

Her company, which worked at Kellingley for 24 years, is owed £10,000 by UK Coal, and she fears she has little or no chance of getting the money back.

Other creditors include Selby Council, which is owed more than £126,000.

Ms Smith said: “These companies, including ourselves, have to plug the holes in their accounts. The knock-on effect for us could result in serious financial implications, resulting in the loss of jobs, orders to other local companies being cancelled, and maybe even closure of our business.”

UK Coal, which operates deep mines at Kellingley in North Yorkshire and Thoresby in Nottingham, announced in July that two of its companies had gone into administration. UK Coal Mine Holdings and UK Coal Operations’ assets are now held in individual companies owned by a new business, UK Coal Production.

The restructuring plans have seen the remaining mines taken over with the backing of Britain’s pension rescue scheme, The Pension Protection Fund (PPF).

The British coal industry has struggled to break even in recent years because of rising costs, hefty pension liabilities and competition from cheap imports. In a letter to Nigel Adams, the Conservative MP for Selby and Ainsty, Ms Smith said: “I am pleased jobs at the colliery have been saved, however at what cost? With UK Coal going into administration, to re-emerge as UK Coal Productions, with the state assistance of PPF, where does this leave their creditors?”

Ms Smith added: “I am aware our outstanding amount pales in comparison to substantial losses which will be incurred by other companies. Do we all have to pretend it has not happened and continue business as usual?

“As a business who pays its taxes and creates employment (we) will be left fighting for any scraps of money remaining.

“Would it not be more appropriate for the ‘new’ company to pay back what it owes?”

Coun Mark Crane, the leader of Selby Council, said Ms Smith had been treated in a shabby way. He added: “I would like to see UK Coal make good its debt to smaller companies.”

A spokesman for Selby Council confirmed that UK Coal owed the council £126,473 in national non-domestic rates. The council is working with the administrators to recover this amount.

A UK Coal spokesman said the administration of UK Coal Mine Holdings and UK Coal Operations followed a devastating fire that closed the Daw Mill deep mine in Warwickshire. The spokesman added: “Production of coal from Daw Mill represented around a third of UK Coal Operations’ revenue and the forced closure of the mine had threatened the ongoing viability of the remaining two deep mines and six surface mines.

“A compromise with major creditors was agreed which enabled the viable mining operations at Kellingley and Thoresby deep mines, and the six surface mines, to successfully restructure and secure 2,000 jobs.

“As part of the restructuring, many difficult decisions had to be taken but this was the best outcome possible to preserve any of the business and save jobs.”

A spokesman for Mr Adams said he had written to Michael Fallon, the Minister of State for Energy last month in connection with the points raised by Ms Smith.

Speaking in July, Mr Adams said: “I am delighted that a deal has been done to save the Big K (Kellingley) and safeguard the 700 jobs there. It’s been a very difficult time for UK Coal and it’s workforce following the fire at Daw Mill. My hat goes off to all those involved including the Government ministers and officials, the Pension Protection Fund and UK Coal”

In July, UK Coal’s chief executive Kevin McCullough said: “Today is very much a day of mixed emotions, but this is the best outcome that it was possible to achieve.

“Entering administration and the subsequent restructuring was the only way we could preserve any of the business and while I’m delighted we’ve saved 2,000 jobs, we’ve also had to make some difficult decisions.”

A spokesman for the administrators, PricewaterhouseCoopers (PwC) declined to comment, but confirmed that the creditors’ report has not been released yet.