White Forest Resources: Appalachian Coal Miner's 200-Day Path to Liquidation

White Forest Resources, Inc. and its 10 affiliated coal mining entities filed for chapter 11 bankruptcy protection in Delaware on February 7, 2025, carrying approximately $79 million in debt and reporting more than 140 environmental violations. The West Virginia-based operator of metallurgical and thermal coal mines entered the case with largely depleted reserves and significant cleanup liabilities. After about 200 days in chapter 11, including two unsuccessful sale processes, the case converted to chapter 7 liquidation in August 2025, with reclamation and remediation liabilities remaining.

The White Forest Resources bankruptcy combined operating disruptions and environmental enforcement. An Office of Surface Mining Reclamation and Enforcement cessation order in January 2025 shut down operations at the company's Rocky Run Surface Mine for 11 days, after equipment failures, landslides, and winter storms disrupted production in late 2024. Environmental advocacy groups, Center for Biological Diversity and Appalachian Voices, had been pursuing the company in multiple federal lawsuits over Clean Water Act violations and threats to endangered species habitat. When those groups sought relief from the automatic stay to continue their litigation, the case also involved debate about coal company accountability and the adequacy of West Virginia's mine cleanup bonding system.

Debtor(s)	White Forest Resources, Inc. (affiliated debtors: 10 additional entities (11 total))
Key Affiliates	South Fork Coal, Xinergy Corp., Raven Crest Mining
Headquarters	Ashford, West Virginia
Industry	Coal Mining / Processing
Coal Type	Metallurgical and Thermal
Petition Date	February 7, 2025
Court	U.S. Bankruptcy Court, District of Delaware
Case Number	25-10148 (Lead Case, Jointly Administered)
Conversion Date	August 25, 2025
Days to Conversion	~200 days
Estimated Assets	$0–$50,000
Estimated Liabilities	$50–$100 million
Financing	Cash Collateral (No DIP)
Debtor's Counsel	Chipman Brown Cicero & Cole LLP
Financial Advisor	Sonoran Capital Advisors, LLC
Claims Agent	Stretto, Inc.
UCC Counsel	Raines Feldman Littrell LLP
Chapter 7 Trustee	Jeoffrey L. Burtch
Trustee's Counsel	Cozen O'Connor

Company Background and Corporate History

Xinergy Origins and Acquisition Strategy

White Forest Resources inherited its operational footprint and debt structure from Xinergy Corp., a Central Appalachian coal producer that had traded on the Toronto Stock Exchange under the ticker XRG. Headquartered in Knoxville, Tennessee, Xinergy pursued an acquisition strategy in the late 2000s to build a portfolio of coal mining operations across the region. The company's largest transaction came in 2010 when it completed the acquisition of Raven Crest Mining, LLC, purchasing a 95% interest through its subsidiary Shenandoah Energy, LLC for $40 million in cash plus the assumption of $18.8 million in existing debt.

The Raven Crest acquisition expanded Xinergy's operations. The acquired assets included approximately 17 million tons of recoverable coal reserves across 12,262 acres of property in Boone County, West Virginia, encompassing two surface mines and one highwall mine. At the time, Xinergy said these reserves would support years of production and cash flow. To finance the transaction, Xinergy secured $75 million in notes from Marret Asset Management at a 9.75% interest rate, with maturity scheduled for April 2015.

The acquisition was debt-funded. Xinergy underwent a prior restructuring in 2016, emerging reorganized as White Forest Resources, as coal markets declined over the following decade. The acquisition debt from 2010 remained as the coal reserves were worked down. The secured notes and their successors persisted through subsequent restructurings while the mineable coal declined.

Operations and Business Model

White Forest Resources operated as a privately held producer of metallurgical and thermal coal from the Central Appalachian coal basin. The company's business model straddled two coal markets: metallurgical coal sold to steel producers and commodities brokers, and thermal coal sold to electric utilities and industrial customers. Thermal coal demand declined as natural gas and renewable energy displaced coal-fired power generation.

The company managed two key mining operations in West Virginia, with South Fork Coal Company operating surface mines near Richwood in Greenbrier County, and the Raven Crest entities maintaining operations inherited from the 2010 acquisition. Coal processing occurred through Bull Creek Processing Company, LLC, one of the 11 affiliated debtors. The structure from mining through processing to customer delivery required coordination across multiple legal entities and operating sites, each carrying its own permits, environmental obligations, and workforce.

The 11 Debtor Entities

The jointly administered bankruptcy cases encompassed 11 affiliated entities reflecting White Forest's corporate structure and acquisition history:

The multi-entity structure reflected acquisition history, with the Raven Crest and Xinergy names persisting from prior transactions, and separate entities for mining, processing, equipment, and mineral rights management. For bankruptcy purposes, all 11 entities were jointly administered under the lead case, though each maintained separate schedules and potential claims.

Environmental Violations and Regulatory Enforcement

A Pattern of Clean Water Act Violations

South Fork Coal Company and its affiliated operations had environmental violations that preceded the bankruptcy filing by years. Conservation organizations characterized the company as having more than 80 clean water violations, with the total count of environmental violations across the mining complex exceeding 140. The violations centered on repeated exceedances of effluent discharge limits under permits issued pursuant to the federal Clean Water Act and the Surface Mining Control and Reclamation Act.

The specific pollutants at issue included iron, manganese, aluminum, sediment, and acid mine drainage, which are associated with Appalachian surface coal mining. When mining operations expose coal seams and overburden rock to air and water, the resulting chemical reactions generate acidic runoff laden with dissolved metals. Without adequate treatment systems, this discharge can flow into streams and affect water quality. At South Fork Coal's mining complex near Richwood, discharge monitoring data showed repeated failures to meet permit limits, triggering notices of violation from state and federal regulators.

The company's mines operated in watersheds near the Cranberry Wilderness in the Monongahela National Forest. Five coal mines in Greenbrier County were implicated in environmental litigation, with operations conducted near the Cranberry Wilderness. The Cranberry Wilderness is one of the largest designated wilderness areas east of the Mississippi River and provides habitat for species found nowhere else in the world.

OSMRE Cessation Order

The immediate cause of the bankruptcy filing was a cessation order issued by the Office of Surface Mining Reclamation and Enforcement in January 2025. OSMRE, a branch of the U.S. Department of the Interior responsible for implementing and enforcing the Surface Mining Control and Reclamation Act of 1977, determined that operations at the Rocky Run Surface Mine posed threats warranting an immediate halt to coal removal.

The cessation order shut down the haul road and prohibited coal removal at Rocky Run for 11 days. The 11-day production halt reduced output while fixed costs continued. Mining operations have fixed costs, including labor, equipment maintenance, debt service, and royalty minimums, that continue regardless of production levels. When production stops, cash flow goes to zero while costs persist.

Cessation orders from OSMRE are issued when mining operations create conditions that pose an imminent danger to public health or safety, or that cause or can reasonably be expected to cause significant environmental harm.

Environmental Litigation Preceding Bankruptcy

Regulatory enforcement was one source of pressure on White Forest operations. In December 2024, two months before the bankruptcy filing, the West Virginia Highlands Conservancy and Appalachian Voices filed suit against South Fork Coal Company in federal court, alleging violations of the Clean Water Act and the Surface Mining Control and Reclamation Act. The lawsuit, filed with representation from Appalachian Mountain Advocates, sought injunctive relief and civil penalties for the company's alleged failure to meet discharge limits at its mining operations.

The lawsuit followed earlier litigation. In November 2023, the Center for Biological Diversity and Appalachian Voices had filed suit against the U.S. Office of Surface Mining Reclamation and Enforcement and the U.S. Fish and Wildlife Service, alleging failure to protect imperiled wildlife, including the endangered Guyandotte River crayfish and candy darter, from coal mining pollution. The organizations' investigation had identified 388 coal mining facilities in West Virginia, Kentucky, and Virginia polluting critical habitat for protected species. While this suit targeted federal agencies rather than White Forest directly, it concerned coal mining pollution and enforcement.

Illegal Transport Through National Forest

Beyond discharge violations, White Forest's operations included another regulatory violation: from 2022 until the bankruptcy filing in 2025, the company illegally transported coal through the Monongahela National Forest. This unauthorized use of Forest Service roads for commercial coal hauling violated federal regulations governing national forest lands. The practice continued for approximately three years before the bankruptcy filing terminated operations.

The illegal forest transport added to the company's regulatory issues beyond water quality. These issues were ongoing during the period leading up to the chapter 11 filing and the sale process.

Operational Disruptions and Path to Bankruptcy

November–December 2024 Disruptions

White Forest's bankruptcy filing followed a series of operational disruptions in the final months of 2024. Multiple sources documented the convergence of events: a severe snowstorm disrupted mining operations, water pump failures occurred at multiple sites, and a rockslide damaged critical infrastructure. The disruptions occurred over a short period while the company faced limited liquidity.

The equipment failures and weather events added pressure to liquidity. Coal mining requires continuous operation of complex mechanical systems, including draglines, haul trucks, conveyors, and processing equipment, and the failure of any critical component halts production. When equipment failures coincided with storm damage and landslide repairs, the company faced simultaneous demands for capital expenditure as revenue fell.

Delayed shipments to customers added to the financial pressure. Coal sales contracts typically specify delivery schedules, and failure to meet those schedules can trigger penalties, permit customer cancellation, or damage long-term commercial relationships. For a company selling into both metallurgical and thermal coal markets, steel mills and power plants plan their operations around expected coal deliveries.

January 2025 Crisis

The events of January 2025 intensified the company's distress. The OSMRE cessation order shutting down Rocky Run Surface Mine for 11 days eliminated the company's remaining production capacity when it needed cash flow. Additional equipment failures during the same period prevented recovery even after the cessation order was lifted.

The filing documents disclosed assets between $0 and $50,000 against liabilities between $50 million and $100 million, indicating limited remaining value against substantial obligations. The chapter 11 filing followed the operational disruptions and balance sheet constraints.

Depleted Reserves and Stranded Debt

A core issue in White Forest's financial distress was the depletion of coal reserves relative to outstanding debt. When Xinergy acquired Raven Crest in 2010, the company gained access to approximately 17 million tons of recoverable reserves. Those reserves supported the $40 million purchase price, the $18.8 million of assumed debt, and the $75 million of acquisition financing, with expectations that coal production and sales would generate cash to repay the obligations.

By 2025, the coal reserves were "largely depleted" while the debt structure persisted. The mines had been worked for 15 years, extracting coal and generating revenue, while acquisition debt and related obligations remained. The result was stranded debt as the assets supporting it were exhausted.

This dynamic is common in extractive industries where asset value depletes through production. Repayment depends on production sufficient to cover acquisition costs, operating costs, and environmental remediation. Market declines, higher operating costs, or larger environmental liabilities reduce cash available for debt service.

The Chapter 11 Case

Filing and First Day Relief

White Forest Resources and its 10 affiliates filed chapter 11 petitions in the U.S. Bankruptcy Court for the District of Delaware on February 7, 2025. The court granted joint administration of all 11 cases on February 11, allowing them to proceed as a single administrative unit while preserving the separate legal existence of each debtor entity.

The debtors filed their cash collateral motion on the petition date, seeking authorization to use cash subject to prepetition lenders' security interests. White Forest did not obtain debtor-in-possession financing and proceeded solely on cash collateral.

The court entered an interim cash collateral order on February 11, 2025, with a final order following on March 12, 2025. The court also entered orders on employee wages, critical vendors, utilities, and insurance. Chipman Brown Cicero & Cole LLP, a Delaware-based firm, served as debtor's counsel, with Sonoran Capital Advisors as financial advisor and Stretto, Inc. as claims and noticing agent.

Failed Sale Attempts

The debtors moved quickly to pursue asset sales. A sale motion was filed on February 12, 2025, five days after the petition date. The court entered a bidding procedures order on March 4, 2025, establishing the framework for qualified bids, an auction if necessary, and sale hearing procedures.

The first sale process did not produce an acceptable bid. No stalking horse bidder had committed to a minimum purchase price, and the marketed assets, including coal mines with depleted reserves, environmental liabilities, and an ongoing chapter 11 case, did not attract a going-concern bidder. Potential acquirers faced environmental cleanup obligations, regulatory scrutiny, reputational considerations, and declining market fundamentals.

A second sale motion was filed on June 16, 2025, attempting to revive the sale process under modified terms. This effort also failed. The liabilities associated with the mining operations were a central issue in the sale process. Potential acquirers would inherit environmental permit obligations, reclamation bonding requirements, ongoing compliance costs, and exposure to pending litigation, liabilities that limited buyer interest.

Environmental Groups Seek Stay Relief

A feature of the White Forest case was the participation of environmental advocacy organizations. On April 17, 2025, the Center for Biological Diversity and Appalachian Voices filed a motion for relief from the automatic stay, seeking permission to continue their prepetition litigation against the debtors notwithstanding the bankruptcy filing.

The automatic stay under Section 362 of the Bankruptcy Code halts most litigation against a debtor upon the filing of a bankruptcy petition. Parties can seek relief from the stay by demonstrating cause, and courts routinely grant stay relief for governmental regulatory actions. The environmental groups' motion raised the issue of how citizen-suit enforcement proceeds during bankruptcy.

The stay relief motion placed environmental litigation in the bankruptcy record. Conservation organizations had invested years in documenting violations, filing administrative complaints, and initiating litigation. The bankruptcy filing stayed those suits unless the court granted relief, and the organizations sought to continue them.

Conversion to Chapter 7

Motion to Convert

By August 2025, the failure of both sale processes and the absence of a viable reorganization path led to conversion to chapter 7. On August 8, 2025, a motion to convert the case from chapter 11 to chapter 7 was filed. The motion documented the debtors' inability to confirm a plan of reorganization, consummate an asset sale, or otherwise achieve an outcome that would justify continued chapter 11 administration.

The motion cited the absence of an operating business to reorganize, the lack of assets to sell at a price sufficient to satisfy claims, and no prospect of emergence as a going concern. Continuing chapter 11 administration would consume estate resources on professional fees while delaying liquidation. Under these circumstances, conversion to chapter 7 was the path to distributing whatever value remained to creditors.

Conversion Order and Trustee Appointment

The court entered the conversion order on August 25, 2025, approximately 200 days after the petition date. The debtors had pursued multiple sale processes, obtained court approval for bidding procedures, and attempted to find a going-concern buyer for their assets. When those efforts failed, conversion followed.

Jeoffrey L. Burtch was appointed as chapter 7 trustee, assuming responsibility for liquidating the estates and investigating prepetition transactions. Cozen O'Connor was retained as trustee's counsel. The appointment of a chapter 7 trustee shifted responsibility for liquidation and investigation to the trustee.

Trustee Investigation

The chapter 7 trustee moved to investigate the estates. On October 21, 2025, the trustee filed a motion for Rule 2004 examination, the bankruptcy procedure allowing discovery into the debtor's affairs, financial condition, and transactions. Rule 2004 examinations can precede evaluation of preference actions, fraudulent transfer claims, or other causes of action that might recover value for the estate.

A trustee status report followed on November 26, 2025, and the meeting of creditors was continued to December 4, 2025. These procedural steps indicated ongoing investigation rather than immediate distribution. In a case involving multiple affiliated entities, complex acquisition history, and potential environmental claims, the trustee's investigation can include prepetition transactions, intercompany transfers, insider dealings, and environmental compliance issues.

Reclamation and Cleanup Liability

Appalachian Mine Cleanup Liabilities

White Forest's liquidation occurs within the context of mine cleanup liabilities across Appalachia. More than 1 million acres of hardwood forest have been destroyed by surface coal mining in the region, along with more than 2,000 miles of streams. These environmental impacts persist long after mining ceases, requiring active reclamation and water treatment to address ongoing pollution.

The problem of "zombie mines," abandoned or idled sites that remain unreclaimed and unmanaged, has grown as coal companies have gone into bond forfeiture, declared bankruptcy, or both. When an operator liquidates without completing reclamation, the responsibility for cleanup falls to the surety companies that issued reclamation bonds. If those bonds are insufficient, the costs shift to state reclamation funds and ultimately to taxpayers.

Research has documented the health impacts of unreclaimed mining. More than 20 peer-reviewed studies link mining pollution to elevated rates of cancer, cardiovascular disease, and birth defects in communities near coal operations. Water quality impacts are documented: 63% of stream beds near coalfields in Appalachian mountains have been identified as "impaired," and 14 West Virginia counties experience drinking water contamination exceeding safe standards by factors of seven or more.

West Virginia's Bonding System Under Strain

West Virginia's mine reclamation bonding system faces stress from the wave of coal bankruptcies. State regulators have acknowledged that the bonding system is "on brink of collapse," with the liquidation of a single major operator potentially bankrupting the state's primary surety bond provider and exhausting the Special Reclamation Fund.

The Surface Mining Control and Reclamation Act of 1977 requires coal mining permit applicants to post reclamation bonds ensuring that regulatory authorities have funds to reclaim sites if operators fail to complete their obligations. Three types of bonds are permitted: collateral bonds (cash or securities), surety bonds (third-party guarantees), and self-bonds (corporate promises without separate collateral). Self-bonding allows operators to rely on corporate guarantees rather than separate collateral, transferring risk to taxpayers when those operators fail.

Legislative efforts to address the gap have stalled. The Coal Cleanup Taxpayer Protection Act, proposed in Congress, would prohibit self-bonding and require operators to provide sufficient financial resources for reclamation. But the bill has not advanced, leaving the existing system in place as bankruptcies continue.

White Forest's Unfunded Liabilities

White Forest's conversion to chapter 7 liquidation adds to West Virginia's unfunded reclamation liability. With assets disclosed at $0–$50,000 against liabilities of $50–$100 million, recoveries are likely limited, and reclamation obligations may go unfulfilled to the extent they exceed whatever bonding exists.

The company's 140+ environmental violations indicate repeated compliance failures before the bankruptcy. Each violation reflects regulatory noncompliance involving discharges or reclamation conditions that require remediation. If the chapter 7 trustee cannot recover sufficient funds to pay for remediation, and if reclamation bonds prove inadequate, remediation may remain unfunded.

Appalachian Coal Industry Context

Structural Decline

White Forest's failure occurred against the backdrop of structural decline in Appalachian coal production. Mapping of coal production trends shows cumulative declines exceeding 700,000 tons in some communities, with production dropping to nearly zero by 2024 in multiple locations. More than half of listed mining locations in the region now show zero production for 2024, suggesting closures rather than temporary idling.

Reported drivers of decline include competition from natural gas made cheaper by hydraulic fracturing, growth of renewable energy reducing demand for coal-fired power generation, retirement of aging coal plants, and increasingly stringent environmental regulation. Metallurgical coal markets, while more stable than thermal coal, still depend on global steel demand that has shifted toward Asian production using different coal sources.

For Appalachian operators, structural decline creates operational challenges. Higher extraction costs relative to Western coal producers, thinner seams requiring more intensive mining, and legacy liabilities from decades of operations reduce margins. When operators like White Forest also carry acquisition debt from transactions predicated on higher coal prices and larger reserves, cash flows tighten further.

Wave of Coal Bankruptcies

Coal company bankruptcies have increased throughout the 2010s and 2020s, with many structured initially as reorganizations but increasingly ending in liquidation. Many cases follow a similar sequence: companies file chapter 11 seeking to shed debt and continue operations, fail to find buyers or confirm plans, and ultimately convert to chapter 7 when reorganization does not occur.

Publicly traded coal operators have experienced stock price declines, while private operators like White Forest often have fewer resources to fund restructuring efforts. Cleanup liabilities and debt obligations accumulated during decades of production are difficult to support with cash flows from remaining reserves. White Forest's 200-day chapter 11 case and ultimate conversion followed this pattern.

Community Economic Impacts

The consequences of coal industry decline extend beyond the companies themselves. Research from the National Bureau of Economic Research documents broad-based negative impacts on Appalachian households from coal decline: decreased credit scores, increased credit utilization, rising delinquencies and collections, elevated bankruptcy rates, and growth in the number of individuals with subprime credit status.

These effects extend beyond individuals who directly lost coal mining jobs. The economic decline affects retailers, service providers, healthcare facilities, and local governments that depended on coal industry employment and tax revenue. When a company like White Forest liquidates, the immediate job losses are compounded by secondary effects throughout the local economy.

Frequently Asked Questions

What is White Forest Resources?

White Forest Resources, Inc. is a West Virginia-based coal mining company that operated 11 affiliated entities including South Fork Coal Company, Xinergy Corp., and four Raven Crest entities. Headquartered in Ashford, West Virginia, the company produced metallurgical and thermal coal from mines in the Central Appalachian coal basin. The company emerged from a 2016 restructuring of Xinergy Corp., which had acquired significant coal reserves through its 2010 purchase of Raven Crest Mining.

Why did White Forest Resources file for bankruptcy?

White Forest filed chapter 11 in February 2025 after a series of operational disruptions including equipment failures, landslides, severe winter storms, and an OSMRE cessation order that shut down its Rocky Run Surface Mine for 11 days. The company carried approximately $79 million in debt against largely depleted coal reserves and faced more than 140 environmental violations. By the time of filing, assets were disclosed at $0–$50,000 against liabilities of $50–$100 million.

What happened to the chapter 11 case?

After approximately 200 days in chapter 11, the case was converted to chapter 7 liquidation on August 25, 2025. The debtors pursued two separate sale processes but did not attract a bidder willing to acquire the mining operations with their associated environmental liabilities. With no viable path to reorganization or going-concern sale, conversion to chapter 7 followed.

What environmental violations did White Forest have?

South Fork Coal Company and affiliated entities accumulated more than 80 clean water violations and 140+ total environmental violations. The violations included effluent limit exceedances for iron, manganese, aluminum, sediment, and acid mine drainage at five coal mines in Greenbrier County near Richwood, West Virginia. Additionally, the company illegally transported coal through the Monongahela National Forest from 2022 until the bankruptcy filing.

What is an OSMRE cessation order?

A cessation order from the Office of Surface Mining Reclamation and Enforcement requires immediate halt of mining operations when they create conditions posing imminent danger to public health or safety, or that cause or can reasonably be expected to cause significant environmental harm. The January 2025 cessation order against White Forest shut down coal removal at the Rocky Run Surface Mine for 11 days, contributing to the cash flow crisis that precipitated bankruptcy.

Who will pay for mine cleanup?

With the company liquidating and assets nearly exhausted, cleanup costs for White Forest's mining operations may fall to West Virginia's Special Reclamation Fund and potentially federal taxpayers. The bonding posted for the mining permits may be insufficient to cover full reclamation costs, particularly given the extent of environmental violations documented before bankruptcy. State regulators have acknowledged that West Virginia's mine cleanup bonding system is under strain from the wave of coal company failures.

Did environmental groups participate in the bankruptcy?

Yes. The Center for Biological Diversity and Appalachian Voices filed a motion for relief from the automatic stay in April 2025, seeking to continue their prepetition environmental litigation against the debtors. These organizations had been pursuing the company for years over Clean Water Act violations and threats to endangered species habitat. Their participation kept environmental claims visible in the bankruptcy process.

Who is the chapter 7 trustee?

Jeoffrey L. Burtch was appointed as chapter 7 trustee following the August 2025 conversion. Cozen O'Connor serves as trustee's counsel. The trustee has been investigating the estates through Rule 2004 examinations and has filed status reports with the court, and may evaluate avoidance actions or other claims to recover value for creditors.

For additional coverage of restructuring developments across industries, visit the ElevenFlo bankruptcy blog.