IN THE UNITED STATES BANKRUPTCY COURT

FOR THE EASTERN DISTRICT OF VIRGINIA

RICHMOND DIVISION

In re:

Alpha Natural Resources, Inc., et al.,

Debtors.

Chapter 11

Case No. 15-33896 (KRH)

(Jointly Administered)

THIRD SUPPLEMENTAL DECLARATION OF KEVIN CARMODY IN SUPPORT OF 

APPLICATION OF THE DEBTORS, PURSUANT TO 

SECTIONS 327(a), 328(a) AND 1107(b) OF THE BANKRUPTCY CODE,

BANKRUPTCY RULE 2014(a) AND LOCAL BANKRUPTCY RULE 2014-1, FOR

AN ORDER AUTHORIZING THEM TO RETAIN AND EMPLOY MCKINSEY 

RECOVERY & TRANSFORMATION SERVICES U.S., LLC AS TURNAROUND 

ADVISOR FOR THE DEBTORS, EFFECTIVE AS OF THE PETITION DATE

I, Kevin Carmody, under penalty of perjury, declare as follows: 

1. On August 3, 2015 (the "Petition Date"), the Debtors commenced their 

reorganization cases by filing voluntary petitions for relief under chapter 11 of title 11 of the United 

States Code (the "Bankruptcy Code"). By order of the Court (Docket No. 129), the Debtors' 

chapter 11 cases have been consolidated for procedural purposes only and are being jointly 

administered. The Debtors are authorized to continue to operate their businesses and manage their 

properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code.

2. I submit this Third Supplemental Declaration (the "Third Supplemental 

Declaration") as a supplement to the declaration dated August 24, 2015 (the “Original 

Declaration”), to the Supplemental Declaration dated November 9, 2015 (the “Supplemental 

Declaration”), and to the Second Supplemental Declaration dated March 25, 2016 (the “Second 

Supplemental Declaration”, and together with the Original Declaration and Supplemental 

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Declaration, the “Prior Declarations”), in support of the application (the "Application") of Alpha 

Natural Resources, Inc. ("ANR") and certain of its direct and indirect subsidiaries, as debtors and 

debtors in possession (collectively, the "Debtors"), to retain and employ McKinsey RTS nunc pro

tunc as of August 3, 2015, as Turnaround Advisor to the Debtors (Docket No. 212), in order 

to provide certain additional information as set forth below. Capitalized terms not expressly 

defined herein shall have the meanings ascribed to them in the Application and Original 

Declaration. 

3. Except as otherwise noted, the statements set forth herein are as a result of 

my employment position and diligence undertaken by me or by professionals working under my 

direction and, if called and sworn as a witness, I would testify competently thereto. 

4. I am making this Third Supplemental Declaration to provide certain 

clarifications and additional information as set forth below. 

5. Members of the McKinsey RTS Team are employed by McKinsey 

Recovery & Transformation Services U.S., LLC, McKinsey & Company, Inc. United States, 

McKinsey & Company, Inc. Canada, McKinsey & Company, Inc. France, McKinsey Solutions 

SPRL, McKinsey Knowledge Centre Belgium, Inc., LLC McKinsey & Company CIS, McKinsey 

Knowledge Centre India Private Limited, McKinsey & Company Inc do Brasil Consultoria Ltda, 

McKinsey & Company, Inc. United Kingdom, McKinsey & Company, Inc. (Malaysia), McKinsey 

& Consulting Company Inc., Shanghai.

6. McKinsey Recovery & Transformation Services U.S., LLC is a direct 

wholly-owned subsidiary of McKinsey & Company, Inc. United States which, in turn, is a direct 

wholly-owned subsidiary of McKinsey Holdings, Inc. which, in turn, is a direct wholly-owned 

subsidiary of McKinsey & Company, Inc.

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7. In preparing its Original Declaration, McKinsey RTS searched its client 

database which covers clients of all its consulting affiliates.

8. Neither McKinsey RTS nor any of its consulting affiliates has ownership in 

any of the Debtors, or entities that are stalking horses or potential buyers, or has submitted a bid 

for the assets of the Debtors, (including credit bids).

9. One confidential client, identified on the list of Interested Parties as a Major 

Competitor, accounts for more than one percent, but less than 1.2%, of McKinsey RTS and 

affiliates’ annual gross revenue on a consolidated basis as of year ended December 2015.

10. This Third Supplemental Declaration supplements the disclosures of 

McKinsey RTS’s client services to certain Interested Parties that were made on a no-names basis 

in the Prior Declarations, and is based upon the further review of such Interested Parties that is 

described below. 

11. In order to provide the names of Interested Parties to which McKinsey RTS 

and the McKinsey RTS Team have rendered services or have connections, McKinsey RTS has 

reviewed the list of Interested Parties to identify lenders included on the Interested Parties list, 

stalking horse bidder(s) as identified in the Disclosure Statement with Respect to Plan of 

Reorganization of Debtors and Debtors in Possession [Docket No. 1703], members of the Official 

Committee of Unsecured Creditors (such Interested Parties being referred to herein as “Major 

Stakeholders”) and Major Competitors to which it has rendered client services. 

12. McKinsey RTS has reviewed its confidentiality obligations to each of its

clients identified as a Major Stakeholder or Major Competitor and, to the extent necessary, 

instructed the relationship partner for each affected client to request the consent of such client 

to disclose its name in connection with this Third Supplemental Declaration. Those clients that 

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did not provide the consent described in the preceding sentence are identified herein as 

“confidential clients”.

13. McKinsey RTS compared the results of this review of the Interested Parties 

list to the disclosures made in the Prior Declarations. McKinsey RTS now discloses by name that 

certain members of McKinsey RTS and/or the McKinsey RTS Team have served the following 

Major Stakeholders and Major Competitors or affiliates thereof: 

i. 3i Debt Management US LLC, identified on the list of Interested Parties as 

a Secured Term Loan Lender;

ii. Allianz Global US, identified on the list of Interested Parties as a Secured 

Term Lender;

iii. Anglo American Plc, identified on the list of Interested Parties as a Major 

Competitor;

iv. Apollo Global Management, LLC, identified on the list of Interested Parties

(via itself or an affiliate thereof) as a Revolving Facility Lender and a Secured Term Loan Lender;

v. Bank of America, identified on the list of Interested Parties (via itself or an 

affiliate thereof) as a Debtors' Professional, Consultant and Service Provider, Depository and 

Disbursement Bank, Revolving Facility Lender and Secured Term Loan Lender;

vi. Citigroup Global Markets, identified on the list of Interested Parties as a 

Revolving Facility Lender;

vii. Deutsche Bank, identified on the list of Interested Parties as a Major Equity 

Holder, Depository and Disbursement Bank, Revolving Facility Lender and Secured Term Loan 

Lender;

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viii. Goldman Sachs Bank USA, identified on the list of Interested Parties as a 

Revolving Facility Lender;

ix. General Electric Capital Corporation, identified on the list of Interested 

Parties as a Lender Under A/R Facility;

x. JPMorgan Chase Bank, N.A., identified on the list of Interested Parties (via 

itself or an affiliate thereof) as a Depository and Disbursement Bank, Revolving Facility Lender

and Secured Term Loan Lender;

xi. Onex Credit Partners, LLC, identified on the list of Interested Parties as a 

Secured Term Loan Lender;

xii. Peabody Energy, Inc., identified on the list of Interested Parties (via itself 

or an affiliate thereof) as a Party to Joint Ventures with the Debtors, Major Customer of the Debtor 

and Major Competitor.

xiii. Bain Capital, an affiliate of Sankaty Advisors, LLC, which is identified on 

the list of Interested Parties as a Secured Term Loan Lender, Second Lien Noteholder, Major 

Unsecured Noteholder and Major Equity Holder;

xiv. Sumitomo Mitsui Banking Corporation, identified on the list of Interested 

Parties as a Depository and Disbursement Bank and Revolving Facility Lender;

xv. Teck Resources, Ltd., identified on the list of Interested Parties as a Major 

Competitor;

xvi. UBS, identified on the list of Interested Parties (via itself or an affiliate 

thereof) as a Depository and Disbursement Bank, Major Equity Holder and Revolving Facility 

Lender;

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xvii. Walter Energy, Inc., identified on the list of Interested Parties as a Major 

Competitor;

xviii. one confidential client that is a Major Stakeholder; and

xix. two confidential clients that are Major Competitors.

In addition, certain members of McKinsey RTS and/or the McKinsey RTS Team served an 

informal creditors’ group of Arch Coal, Inc., identified on the list of Interested Parties as a Major 

Competitor, a Party to Joint Ventures with the Debtors and a Party to Material Unexpired Leases 

of the Debtors. 

14. As to each of these connections, McKinsey RTS has re-confirmed that its 

services rendered to such entity in the past two years has been rendered on matters unrelated to 

the Debtors and their chapter 11 cases.

15. McKinsey RTS does not have a specific agreement to refer or accept 

referrals from any professional in this case. Further, McKinsey RTS does not receive a significant 

portion of its referrals from any professional retained in this case. As previously disclosed, as part 

of its diverse practice, McKinsey RTS and its affiliates are involved in numerous matters and 

transactions involving many different professionals, including attorneys, accountants and financial 

consultants, some of which may represent the Debtors or claimants and Interested Parties in the 

Debtors' chapter 11 cases. For instance, McKinsey RTS and its affiliates may have in the past 

been represented by, may currently be represented by, and may in the future be represented by 

attorneys, law firms or financial advisors who are involved in these proceedings, including law 

firms and financial advisors representing the Debtors. Further, McKinsey RTS and its affiliates 

may in the past have served, may currently serve, and may in the future serve professionals in these 

cases on matters unrelated to the Debtors' chapter 11 cases. In addition, McKinsey RTS and its 

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affiliates may in the past have worked with, may currently work with, and likely will in the future 

work with professionals in these cases on matters unrelated to these cases. Lastly, McKinsey RTS 

and its affiliates may have in the past contracted with, may currently contract with, and may in the 

future contract with certain service providers listed on the Interested Parties List for necessary 

business services. Based upon my current knowledge of the professionals involved, to the best of 

my knowledge, none of these business relations constitute interests materially adverse to the 

Debtors herein in matters upon which McKinsey RTS is to be employed, and none are in 

connection with these cases.

16. The following members of the McKinsey RTS Team were previously 

employed by certain Interested Parties, or affiliates thereof, as described below: 

i. Ignace Proot – ArcelorMittal Flat Carbon Europe (identified on the list of 

Interested Parties (via itself or an affiliate thereof) as a Party to Material Unexpired Leases with 

the Debtor, Major Customer of the Debtor, and a Major Competitor) – worked on operational 

improvement programs for the Strategy Definition and Support team and the Leadership Progress 

Academy from January 2009 until December 2012.

ii. Rick Notarianni – BENTEK Energy, LLC, a subsidiary of the The McGrawHill Companies, Inc., the parent of Standard & Poor’s (identified on the list of Interested Parties 

as a Debtors' Professional, Consultant and /or Service Provider) – worked as an Energy Analyst 

and Manager for BENTEK’s Oil and Gas group from June 2012 to March 2014. Rick is no longer 

an employee of McKinsey & Company, Inc.

iii. Brian Green –Nalco Champion, the oil and gas products unit of Nalco Co., 

identified on the list of Interested Parties as a Major Supplier of Goods and Services – worked as 

a MBA Finance Summer Intern from June 2014 to August 2014. 

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iv. Heather Eisenman – GE Oil & Gas (identified on the list of Interested 

Parties (via itself or an affiliate thereof) as a Lender Under A/R Facility) – worked as a Sales 

Application Engineer and Manufacturing Engineer from July 2010 to July 2013.

17. To the best of my knowledge none of McKinsey RTS or its affiliates serve 

Rice Energy Holdings LLC or Rice Drilling B LLC or any of their affiliates.

18. As previously stated, “McKinsey RTS and its affiliates . . . . provide overall 

strategic analysis and advice to companies that operate in the industries in which the Debtors 

operate, which analysis and advice could include review and comment on publicly available 

information and strategic considerations with respect to the Debtors, as well as other companies.”

McKinsey RTS and affiliates’ service to other companies in the industry in which the Debtors 

operate may focus on the macro landscape of the industry but should have no direct effect on 

the Debtors given the nature of the market. If any work for other clients of McKinsey RTS or 

its affiliates specifically focused on or affected the Debtors, it would have been explicitly stated 

in the Prior Declarations.

19. Although not a party on the Interested Parties List, McKinsey RTS was 

made aware that there is a company that may make a confidential offer for certain assets of the 

Debtors. While McKinsey RTS has not provided services to such company or its parent company, 

it provided services last year to an affiliate of such company on matters unrelated to the Debtors 

and these chapter 11 cases.

20. MIO Partners, Inc. and MIO Partners (EU) (together “MIO”) serves 

McKinsey's pension plans, partners, and former partners by offering a portfolio of investment 

products with a variety of structures, risk levels, and currencies. The team primarily uses thirdparty fund managers who make investment decisions independently of MIO. MIO investors 

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make investments with MIO essentially on a “blind trust” basis, with such MIO investors having 

no access to information about the underlying holdings in the third-party funds. MIO is 

managed independently, and all its investment activities are separate from McKinsey's 

consulting operations. As such, MIO does not make any investment decisions based on the use 

of McKinsey RTS and affiliates’ client information. Certain members of MIO’s board of 

directors are also employees of McKinsey RTS and its affiliates, including one director who is 

also a director and officer of McKinsey RTS. MIO’s board of directors (through the investment 

committee of that board which generally meets on a quarterly basis) is primarily responsible for 

overseeing, reviewing and approving MIO’s overall allocation amongst the various MIO 

managed investment products.

21. The search results described in this Third Supplemental Declaration are 

based on research conducted by McKinsey RTS in order to prepare the disclosures set forth in the 

Prior Declarations. 

22. The Supplemental Declaration and the Second Supplemental Declaration

updated McKinsey RTS’s disclosures to reflect the addition of new individuals to the McKinsey 

RTS Team. The updated research conducted to make those disclosures related only to the newlyadded individual McKinsey RTS Team members, not to members of McKinsey RTS who were 

not part of the McKinsey RTS Team.

23. McKinsey RTS has not conducted new firm-wide surveys or research to 

determine whether new client service relationships have been formed since the surveys and 

research conducted in connection with the Original Declaration. 

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24. McKinsey RTS understands it has the obligation pursuant to Bankruptcy 

Rule 2014 to further supplement its declarations in the event it becomes aware of any relationship 

or other information that requires disclosure.

25. Pursuant to 28 U.S.C. § 1746, I declare under penalty of perjury that the 

foregoing is true and correct.

Dated: May 18, 2016

Chicago, Illinois

______________________

Kevin Carmody

Practice Leader

McKinsey Recovery & 

Transformation Services U.S., LLC

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