Wilson Creek Energy: 164-Day $15M Rosebud Sale Ends Cross-Border Coal Bankruptcy

When Wilson Creek Energy, LLC and ten affiliated entities filed for chapter 11 protection on January 6, 2025, the case involved Appalachian metallurgical coal production and a cross-border restructuring. Wilson Creek's metallurgical coal mines supplied blast furnace steelmakers including U.S. Steel and Cleveland-Cliffs. The filing followed an effort to secure a USDA Rural Development Business and Industry loan guarantee that did not close in time, and the Canadian-listed parent Corsa Coal Corp. and its approximately 300 employees entered a cross-border restructuring. Within 164 days, a 363 sale process transferred the debtor's Pennsylvania and Maryland mining operations to regional operator Rosebud Mining Company for $15 million, and Pennsylvania environmental regulators objected to the transfer of more than $100 million in land reclamation and water treatment obligations.

The Wilson Creek Energy case included cross-border recognition proceedings in Canada and disputes over environmental liabilities. As Maryland's largest underground coal mine changed hands and Canadian recognition proceedings wound down with the U.S. dismissal, the auction drew a single bidder.

Debtor(s)	Wilson Creek Energy, LLC (affiliated debtors: 10 additional entities (11 total))
Parent Company	Corsa Coal Corp. (TSX: CSO)
Key Affiliates	Wilson Creek Holdings, Inc.; Quecreek Mining, Inc.; Rox Coal, Inc.; Roxcoal, Inc.
Headquarters	Pennsylvania
Industry	Metallurgical Coal Mining
Petition Date	January 6, 2025
Court	U.S. Bankruptcy Court, Western District of Pennsylvania
Case Number	25-70001 (Lead Case, Jointly Administered)
Judge	Hon. Jeffery A. Deller
Plan Type	No Plan (363 Sale / Case Dismissed)
Sale Order	March 28, 2025
Dismissal Date	June 18, 2025
Days to Dismissal	164 days
DIP Facility	lender: KeyBank National Association
Purchasers	Rosebud Mining Company; KIA II, LLC / Elk Horn Equipment Sales and Services, LLC
Purchase Price	$15 million (Rosebud Mining)
Debtor's Counsel	Raines Feldman Littrell LLP
Financial Advisor	BDO Consulting Group, LLC
Canadian Counsel	Stikeman Elliott LLP
Claims Agent	Omni Agent Solutions, Inc.

Company Background and Corsa Coal Corp.

Corporate Structure and Canadian Parentage

Wilson Creek Energy operated as the primary U.S. operating subsidiary of Corsa Coal Corp., a publicly traded Canadian company listed on the Toronto Stock Exchange under the ticker CSO. The corporate structure included a Canadian parent with U.S. operating assets, which required cross-border coordination during the restructuring. Corsa Coal served as the corporate parent for a group of mining entities, holding companies, and operational subsidiaries across the Appalachian coal region.

The debtor group included Wilson Creek Holdings, Inc. as an intermediate holding company, along with multiple mining-focused operating entities. Rox Coal, Inc. held certain coal mining permits and properties, while Quecreek Mining, Inc. represented another operating company within the corporate family. Roxcoal, Inc. rounded out the identified subsidiaries, though the full corporate structure encompassed eleven separate legal entities that filed chapter 11 petitions simultaneously. The structure separated permits, properties, and liabilities across multiple entities.

The Canadian parentage affected the restructuring process. The publicly traded status of the parent company meant additional disclosure obligations, securities law considerations, and the involvement of Canadian regulators and courts in recognition proceedings.

Mining Operations in Pennsylvania and Maryland

Wilson Creek Energy's operations centered on three deep mines producing metallurgical coal for the steel industry, supported by coal processing facilities. The Somerset County, Pennsylvania region served as the company's operations base, with the Acosta deep mine and Keyser deep mine both situated in the Appalachian coal region. These underground operations extracted metallurgical-grade coal using deep mining techniques, processing the raw product through the Wilson Creek preparation plant located in neighboring Cambria County.

Across the state line in Garrett County, Maryland, the Casselman deep mine is Maryland's largest underground coal mine. The metallurgical coal extracted from Casselman fed blast furnaces producing steel, a different end market than the power generation facilities served by thermal coal producers.

The customer base included supply contracts with U.S. Steel, Cleveland-Cliffs, and Middletown Coke Company, tying the operations directly to integrated steel producers and coke manufacturers serving the North American steel industry.

At the time of filing, Wilson Creek employed approximately 300 workers across its mining and processing operations. These employees included underground miners, equipment operators, processing plant workers, and support personnel.

The 11 Debtor Entities

The jointly administered bankruptcy encompassed the following debtor entities, each filing its own chapter 11 petition subject to joint administration under the lead case:

The structure included Rox Coal, Inc., Quecreek Mining, Inc., and Roxcoal, Inc. among the affiliated entities, though the precise case number assignments for each entity varied within the 25-70001 through 25-70011 range. Joint administration allowed the court to manage all eleven cases under a single docket while maintaining separate estates for purposes of asset ownership, liability allocation, and distribution priority.

Path to Bankruptcy

Failed USDA Loan and Liquidity Crisis

The filing followed a failed attempt to secure government-backed financing through a USDA Rural Development Business and Industry loan guarantee—a federal program designed to support rural business development and employment preservation by guaranteeing loans from commercial lenders to qualifying enterprises in rural areas. The guarantee approval was not received in time. By early January 2025, the company announced that attempts at refinancing and other strategic alternatives had been exhausted and it would proceed through chapter 11.

The company's prepetition capital structure included secured debt held by KeyBank National Association, which served as the primary secured lender. The company entered chapter 11 and pursued an asset sale process.

Metallurgical Coal Market Dynamics

The global metallurgical coal market, valued at approximately $14.7 billion in 2023, projects growth toward $18.4 billion by 2032—a compound annual growth rate of 2.6%.

The fundamental demand driver for metallurgical coal remains steel production. Approximately 770 kilograms of coal are required to produce one ton of steel through the blast furnace route. The United States produced over 90 million metric tons of steel annually and operated at approximately 90% of domestic coke production capacity.

Trade policy shifts including China's 15% retaliatory tariff on U.S. coal imports affected export markets, while Chinese imports from other sources increased substantially. North American metallurgical coal markets faced price volatility and competition from Australian and other international suppliers.

The Chapter 11 Case

Filing and First Day Relief

Wilson Creek Energy and its ten affiliated debtors filed chapter 11 petitions on January 6, 2025, in the U.S. Bankruptcy Court for the Western District of Pennsylvania. The case was assigned to Judge Jeffery A. Deller, who has served on the Western District bench since 2005 and served as Chief Judge from 2013 through 2018. Judge Deller is a contributing author to Collier on Bankruptcy.

The court granted joint administration on the first day, allowing the eleven separate cases to proceed under a single docket. Kevin Harrigan, serving as President and Chief Executive Officer, provided the First Day Declaration establishing the factual basis for the various emergency relief requests. The first day package included:

The court entered interim first day orders on January 8, 2025. The debtors also sought and received a complex case designation.

DIP Financing from KeyBank

KeyBank National Association, which held the prepetition secured debt, provided debtor-in-possession financing to fund operations and the sale process. This roll-up structure provided postpetition financing secured by the lender's existing collateral position.

The DIP financing proceeded on the following schedule:

The Final DIP Order entered on January 28, 2025, coincided with the bidding procedures order.

Cross-Border Recognition Proceedings

The Canadian parentage of Corsa Coal Corp. led to recognition proceedings in Canada. On January 8, 2025—just two days after the initial U.S. filing—the court entered an order authorizing Corsa Coal Corp. to act as foreign representative for purposes of seeking recognition of the chapter 11 proceedings in Canadian courts.

Corsa Coal pursued recognition under Canada's Companies' Creditors Arrangement Act (CCAA), the primary Canadian statute for corporate restructurings. The Ontario Superior Court of Justice (Commercial List) issued an Initial Recognition Order, with PwC Canada appointed as Information Officer to monitor the proceedings and report to the Canadian court.

The cross-border framework used in the Wilson Creek case relied on Section 18.6 of the CCAA, which provides the mechanism for Canadian courts to recognize and defer to U.S. chapter 11 proceedings when the U.S. represents the center of main interests or when coordination serves stakeholder interests. The Canadian Recognition Order, issued on February 24, 2025, approved and gave effect to certain orders from the U.S. court, including the sale process orders.

Stikeman Elliott LLP served as Canadian counsel to the Corsa Group, coordinating the Ontario proceedings with the U.S. case team.

Environmental Regulatory Challenges

Commonwealth of Pennsylvania Motion

On February 14, 2025, the Commonwealth of Pennsylvania filed a motion asserting that the automatic stay did not excuse the debtors from complying with state environmental laws related to coal mining operations.

This motion reflected the "police and regulatory power" exception to the automatic stay under Bankruptcy Code Section 362(b)(4), which permits governmental units to continue exercising regulatory authority over debtors even during bankruptcy. Coal mining operations face environmental regulatory requirements under the Surface Mining Control and Reclamation Act of 1977 and corresponding state programs administered under federal oversight by the Office of Surface Mining Reclamation and Enforcement (OSMRE).

Pennsylvania maintains a regulatory program for coal mining that includes:

• Permit requirements for surface and underground mining
• Contemporaneous reclamation obligations during active mining
• Bonding requirements to secure future reclamation performance
• Water treatment obligations that may continue indefinitely
• Enforcement authority for permit violations

The Commonwealth's motion stated that the automatic stay did not excuse compliance with state environmental laws.

Pennsylvania DEP Sale Objection

The Pennsylvania Department of Environmental Protection objected to the proposed sale to Rosebud Mining. The DEP's objection stated that the proposed transaction did not adequately address the transfer of more than $100 million in land reclamation and water treatment obligations associated with the mining operations.

The objection focused on environmental liabilities tied to coal mining operations, which can include long-term obligations that continue after mining ceases:

Reclamation obligations require mining operators to restore land disturbed by mining activities to an approved post-mining land use. This includes regrading, topsoil replacement, revegetation, and structure removal—obligations secured by bonding requirements.

Water treatment obligations can be particularly onerous for underground mines that generate acid mine drainage or other contaminated water that requires treatment in perpetuity. These obligations can continue indefinitely after mining operations cease, creating liabilities that compound over time.

The DEP said the sale structure could leave the state responsible for environmental cleanup if the purchaser failed to perform. Successor liability issues in 363 sales are often disputed, with purchasers seeking to acquire assets "free and clear" of claims and encumbrances while governmental units assert that environmental obligations "run with the land" regardless of sale order provisions.

The court considered all objections and approved the sale.

The 363 Sale Process

Sale Motion and Bidding Procedures

The debtors initiated the sale process by filing the Sale Motion on January 16, 2025—ten days after the petition date. This motion became the most-referenced document on the docket with 41 references by other filings.

The court approved bidding procedures on January 28, 2025, establishing the framework for marketing the assets and conducting an auction. The timeline was:

The bidding procedures contemplated a public auction process with interested parties able to submit qualified bids for some or all of the debtor's assets. Executory contracts and unexpired leases, including supply agreements with steel companies, were identified as potential assets subject to assumption and assignment to a successful purchaser.

Rosebud Mining as Purchaser

Rosebud Mining Company, a regional coal operator headquartered in Kittanning, Pennsylvania, emerged as the successful purchaser at the March 12, 2025 auction. Rosebud was the only bidder at the auction.

Judge Deller approved the sale on March 28, 2025, with multiple sale orders entered to address different asset packages:

The Rosebud transaction included the following operating assets:

• Acosta deep mine (Somerset County, Pennsylvania)
• Keyser deep mine (Somerset County, Pennsylvania)
• Casselman deep mine (Garrett County, Maryland)
• Wilson Creek preparation plant (Cambria County, Pennsylvania)
• Supply contracts with U.S. Steel, Cleveland-Cliffs, and Middletown Coke Company

The purchase price was $15 million.

KIA II and Equipment Assets

Beyond the Rosebud acquisition of mining operations, a second purchaser—KIA II, LLC—acquired equipment and other assets from the debtor estate. KIA II later changed its name to Elk Horn Equipment Sales and Services, LLC.

The KIA II transaction proceeded through the same sale order process but covered distinct asset categories, primarily mobile equipment and other property not directly tied to the ongoing mining operations acquired by Rosebud.

A post-dismissal development occurred when Elk Horn Equipment Sales and Services, LLC (the KIA II successor) filed a motion to enforce the sale order on July 8, 2025. This motion arose after the bankruptcy case had already been dismissed, requiring the court to retain jurisdiction over sale order enforcement. The dispute was resolved through a stipulated settlement order entered on August 12, 2025.

Workforce Transition

Rosebud Mining hired approximately 50 former Corsa Coal employees following the acquisition, retaining primarily those employees associated with the Casselman mine operations in Maryland. Wilson Creek had approximately 300 employees at the time of filing.

Case Resolution

Motion to Dismiss and Case Termination

With the sale process complete and material assets transferred to purchasers, the debtors moved to dismiss the chapter 11 cases rather than proceeding through plan confirmation. The Motion to Dismiss filed on June 3, 2025 sought termination of the cases with exculpation protections for parties who had acted in good faith during the proceedings.

The court entered the Dismissal Order on June 18, 2025—164 days after the January 6, 2025 petition date. The dismissal order included exculpation provisions protecting certain parties from liability arising from their roles in the chapter 11 cases.

CCAA Termination in Canada

The Canadian recognition proceedings wound down in parallel with the U.S. dismissal. On July 18, 2025, the Ontario Superior Court of Justice issued the Foreign Recognition and CCAA Termination Order, which:

• Recognized the U.S. dismissal and sale completion
• Terminated the Recognition Proceedings
• Discharged PwC Canada as Information Officer
• Lifted the stay of proceedings

The termination order followed the U.S. dismissal and sale completion.

Professional Fee Resolutions

The professional fee process concluded with final fee orders for the advisors listed below:

The Official Committee of Unsecured Creditors had retained Dentons Cohen & Grigsby P.C. as counsel and Huron Consulting Services, LLC as financial advisor. The fee procedures order entered on January 27, 2025 had established the framework for interim compensation and final fee applications.

Industry Context and Analysis

Metallurgical Coal's Distinct Position

Metallurgical coal, also called coking coal, is used in blast furnace steelmaking where it is converted to coke that provides the carbon source and heat for reducing iron ore to molten iron. Thermal coal is used for power generation. Electric arc furnace production uses scrap steel rather than virgin iron ore and does not require metallurgical coal.

Metallurgical coal producers depend on production costs, transportation logistics, coal quality, and the ability to maintain customer relationships. Wilson Creek's supply contracts with integrated steelmakers linked the operations to blast furnace steelmaking demand.

Reclamation Liability in Coal Bankruptcies

The Pennsylvania DEP's objection to the Wilson Creek sale focused on environmental reclamation and water treatment liabilities. These obligations, which can exceed $100 million for a single mining complex, affect 363 sale processes that typically seek to transfer assets "free and clear" of claims.

The Surface Mining Control and Reclamation Act establishes the federal framework for reclamation bonding, requiring mining operators to post financial assurances securing their reclamation performance. State programs like Pennsylvania's, administered under federal oversight, implement these requirements and maintain enforcement authority over mining operations.

Several factors complicate the treatment of these liabilities in bankruptcy:

Bonding insufficiency: Mining companies have historically been permitted to "self-bond" reclamation obligations based on corporate financial strength, without posting cash or surety bonds. When these companies enter bankruptcy, self-bonds may not cover the reclamation obligations. The Coal Cleanup Taxpayer Protection Act, reintroduced periodically in Congress, would prohibit self-bonding.

Obligations running with land: Environmental regulators argue that reclamation obligations attach to the land itself and cannot be discharged through bankruptcy or avoided through sale order provisions. Courts have reached varying conclusions on these issues.

Water treatment in perpetuity: Some mining operations generate contaminated water requiring treatment indefinitely, creating liabilities that are difficult to quantify.

Cross-Border Proceedings

The Wilson Creek case included cross-border insolvency coordination between the United States and Canada. The legal frameworks supporting this coordination include:

Chapter 15 of the U.S. Bankruptcy Code, adopted in 2005 based on the UNCITRAL Model Law on Cross-Border Insolvency, provides the U.S. framework for recognizing foreign proceedings and coordinating with foreign courts. Section 18.6 of Canada's CCAA provides the corresponding mechanism for Canadian courts to recognize and give effect to U.S. proceedings.

In Wilson Creek, the proceedings included:

• Authorization of the Canadian parent as foreign representative (January 8, 2025)
• Canadian recognition of U.S. proceedings (February 24, 2025)
• Termination of the recognition proceedings (July 18, 2025)

Frequently Asked Questions

What is Wilson Creek Energy?

Wilson Creek Energy, LLC is a metallurgical coal mining company that operated as the primary U.S. subsidiary of Corsa Coal Corp., a publicly traded Canadian company listed on the Toronto Stock Exchange. Wilson Creek operated deep mines in Pennsylvania and Maryland producing metallurgical coal for steel industry customers including U.S. Steel and Cleveland-Cliffs, employing approximately 300 people at the time of its January 2025 bankruptcy filing.

Why did Wilson Creek file for bankruptcy?

Wilson Creek filed chapter 11 in January 2025 after failing to secure a USDA Rural Development Business and Industry loan guarantee. The company said it had exhausted refinancing options and other strategic alternatives and would pursue a sale process through chapter 11.

Who bought Wilson Creek's mines?

Rosebud Mining Company, a regional coal operator headquartered in Kittanning, Pennsylvania, purchased the Acosta, Keyser, and Casselman mines along with the Wilson Creek preparation plant for $15 million. Rosebud was the only bidder at the March 2025 auction. A second purchaser, KIA II, LLC (now Elk Horn Equipment Sales and Services, LLC), acquired equipment and other assets.

What happened to the employees?

Rosebud Mining retained approximately 50 former Corsa Coal employees following the acquisition, primarily those working at the Casselman mine in Maryland. Wilson Creek had approximately 300 employees at the time of the bankruptcy filing.

What is the Casselman mine?

The Casselman deep mine, located in Garrett County, Maryland, is Maryland's largest underground coal mine. It produces metallurgical coal used in blast furnaces for steel production and was included in the Wilson Creek bankruptcy sale. The mine continued operating under Rosebud Mining's ownership following the acquisition.

What were the environmental issues in the case?

The Pennsylvania Department of Environmental Protection objected to the sale, arguing that the transaction did not adequately address more than $100 million in land reclamation and water treatment obligations associated with the mining operations. The court considered these objections before approving the sale to Rosebud Mining.

How long did the bankruptcy case last?

The case lasted 164 days from the January 6, 2025 filing to the June 18, 2025 dismissal order.

What is metallurgical coal and why does it matter?

Metallurgical coal, also called coking coal, is used in steelmaking blast furnaces where it provides the carbon source and heat for reducing iron ore to molten iron. Thermal coal is used for power generation.

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For more analysis of restructurings in the mining and energy sectors, visit ElevenFlo's bankruptcy blog.