Wilson Creek Energy Bankruptcy: $15M Rosebud Sale Splits Coal Assets, Case Dismissed
ElevenFlo Research
January 3, 202617 min readUpdated September 8, 2026
Wilson Creek Energy, LLC ran a 164-day chapter 11 that ended in dismissal rather than a plan, after a court-supervised auction split the Appalachian metallurgical coal producer's assets among three buyers and left its largest environmental liabilities behind for Pennsylvania-administered cleanup trusts. Rosebud Mining Company took the operating mines for $15 million, the debtors' own DIP lender, KIA II, LLC, took real property and equipment for $7 million, and LCT Energy, LP — a bidder the debtors had earlier accused of misusing confidential diligence information — took a third lot for $1.5 million.
Wilson Creek and ten affiliated debtors, including Canadian parent Corsa Coal Corp., filed chapter 11 petitions on January 6, 2025 in the U.S. Bankruptcy Court for the Western District of Pennsylvania, lead case 25-70001 before Judge Jeffery A. Deller. The first-day declaration tied the filing to geological problems, depressed coal pricing, and a delayed USDA-backed refinancing, and put the enterprise at roughly 365 employees and about one million tons of annual production. A parallel Canadian recognition proceeding ran alongside the U.S. case from its second day.
Wilson Creek Energy, LLC (11 jointly administered entities)
Parent Company
Corsa Coal Corp. (TSXV / OTCQX)
Key Affiliates
Corsa Coal Corp.; Wilson Creek Holdings, Inc.; RoxCoal, Inc.; PBS Coals, Inc.; Quecreek Mining, Inc.
Headquarters
Friedens, Somerset County, Pennsylvania
Industry
Metallurgical Coal Mining
Petition Date
January 6, 2025
Court
U.S. Bankruptcy Court, Western District of Pennsylvania (Johnstown)
Case Number
25-70001 (Lead Case, Jointly Administered)
Judge
Hon. Jeffery A. Deller
Plan Type
No Plan (363 Sales / Case Dismissed)
Sale Orders
March 28, 2025
Dismissal Date
June 18, 2025 (164 days)
DIP Facility
$15 million ($10M new money + $5M roll-up); source: KIA II, LLC (Final DIP Order)
Purchasers / Consideration
Rosebud Mining Company ($15M); KIA II, LLC ($7M); LCT Energy, LP ($1.5M)
Case Snapshot
Corsa Coal's Appalachian Met-Coal Footprint
Wilson Creek Energy operated as the principal U.S. operating subsidiary of Corsa Coal Corp., a publicly traded Canadian company whose shares traded on the TSX Venture Exchange and OTCQX. The first-day declaration of President and Chief Executive Officer Kevin Harrigan described an enterprise headquartered in Friedens, Somerset County, Pennsylvania, that mined, processed, washed, blended, and loaded premium metallurgical coal, with annual production and sales of about one million tons. The structure placed a Canadian public parent over U.S. operating assets, a configuration that required cross-border coordination once the case began.
The eleven debtors filed separate petitions under joint administration in the lead case. Beyond Wilson Creek Energy and its holding company, Wilson Creek Holdings, Inc., the group included Corsa Coal Corp. itself along with operating and permit-holding entities such as RoxCoal, Inc., PBS Coals, Inc., Quecreek Mining, Inc., and Elk Lick Energy, Inc. Joint administration let the court manage all eleven cases on a single docket while preserving separate estates for asset ownership, liability allocation, and distribution priority.
The operating footprint spanned the Pennsylvania–Maryland state line. The first-day declaration identified six underground and surface mines — Acosta, Casselman, Horning, Schrock Run, Rhoads, and Byers — plus the Shade Creek Preparation Plant and an idle Cambria Preparation Plant. The Casselman deep mine in Garrett County, Maryland is the state's largest underground coal mine. Unlike thermal coal sold to power generators, Wilson Creek's metallurgical coal fed blast-furnace steelmakers, and its supply contracts ran to U.S. Steel, Cleveland-Cliffs, and Middletown Coke Company, tying output directly to integrated steel and coke producers.
Geological Decline and the KeyBank Debt Stack
Management attributed the filing to a combination of operational, market, and financing pressure. The first-day declaration stated that geological problems beginning in late 2023 cut output and raised costs, while limited access to capital deferred equipment repairs and infrastructure investment. Deteriorating metallurgical coal markets and inflationary cost pressure compounded the strain, and 2024 pricing fell below the company's cost of mining. Multiple other U.S. metallurgical coal producers filed for chapter 11 in the same period; by early 2025 those filings represented roughly 6.8 million metric tons of estimated annual production capacity lost to insolvency proceedings. By the petition date the debtors held about $1.2 million of cash against a payroll obligation of roughly $1.4 million coming due shortly after filing.
The liquidity squeeze tightened when a planned refinancing fell through. The company had pursued a USDA Rural Development Business and Industry loan guarantee to refinance its KeyBank facility, but the guarantee did not close in time, and mandatory prepayment and milestone pressure under the existing secured debt accelerated the timeline. By early January 2025 the company announced that refinancing and other strategic alternatives had been exhausted and that it would proceed through chapter 11 toward a prompt sale.
Prepetition capital structure. The first-day declaration identified approximately $16.3 million outstanding under the Main Street secured term loan held by KeyBank National Association, alongside an LSQ Funding Group receivables facility and several equipment-financing obligations. Together with the equipment lenders, total secured exposure approached the $20.9 million figure later reported in coverage of the case, while estimated unsecured trade debt stood at roughly $21.3 million.
Instrument
Amount
Holder
Main Street secured term loan
~$16.3 million
KeyBank National Association
Receivables facility
undisclosed
LSQ Funding Group
Equipment financing
~$2.27 million
Bill Miller Equipment Sales
Equipment financing
~$2.14 million
Wingspire Equipment Finance
Equipment financing
~$206,475
R&D Svonavec Ventures
Equipment financing
~$151,077
Cleveland Brothers Equipment
Unsecured trade debt (est.)
~$21.3 million
Trade creditors
Prepetition Capital Structure (per First Day Declaration)
DIP Financing and the KIA II Facility
The debtors filed their DIP financing motion on the petition date and entered an interim order on January 8, 2025. The amended first-day declaration identified KIA II, LLC as the source of the debtor-in-possession financing, with availability split between interim and final tranches.
The final cash collateral and DIP order, entered January 28, 2025, authorized a $15 million postpetition facility comprising $10 million of new-money term debt and a $5 million roll-up of prepetition secured obligations. Maturity ran to the earliest of plan effectiveness, a sale of substantially all assets, acceleration after default, or 120 days after the petition date. The order imposed case milestones, required compliance with an approved budget subject to variance limits, granted replacement liens and superpriority claims to the prepetition secured parties, and preserved a carve-out for professional fees and U.S. Trustee fees. KIA II, the DIP lender, was also one of the three winning bidders at the subsequent auction.
Cross-Border Recognition Under the CCAA
Corsa Coal's Canadian parentage produced a parallel recognition proceeding that tracked the U.S. case. On January 8, 2025 — two days after the petition — the court authorized Corsa Coal Corp. to act as foreign representative for purposes of seeking recognition in Canada. The company then pursued recognition under Canada's Companies' Creditors Arrangement Act, the principal statute for Canadian corporate restructurings, before the Ontario Superior Court of Justice (Commercial List).
PwC Canada was appointed Information Officer to monitor the proceedings and report to the Ontario court, and Stikeman Elliott LLP served as Canadian counsel to the Corsa group. The Ontario court issued an Initial Recognition Order and, on February 24, 2025, a recognition order giving effect to U.S. orders including the sale-process orders. The recognition proceeding stayed open until the U.S. case wound down, closing with a Foreign Recognition and CCAA Termination Order on July 18, 2025 that recognized the U.S. dismissal and sale completion, terminated the proceedings, discharged PwC Canada, and lifted the Canadian stay.
PA DEP's Reclamation Fight and Cleanup Settlement
Pennsylvania environmental regulators pressed reclamation and water-supply obligations throughout the sale process. On February 14, 2025 the Commonwealth of Pennsylvania filed a motion asserting that the automatic stay did not excuse compliance with state mining and environmental law, including bonding tied to ongoing and future replacement-water-supply obligations for contaminated private water supplies. The Commonwealth framed that relief as an exercise of police and regulatory power under Bankruptcy Code Section 362(b)(4), which permits governmental units to keep enforcing regulatory authority during a bankruptcy.
Ten days later the Pennsylvania Department of Environmental Protection objected to the sale motion. The department argued that any buyer of permitted mining assets had to assume full reclamation and compliance obligations under Pennsylvania law, that successor operators could not limit those liabilities to post-closing periods, and that replacement bonding had to be set by the department rather than fixed in the asset purchase agreement. It also opposed distributing sale proceeds ahead of environmental compliance and sought sale-order language preserving police-power enforcement and permitting requirements. Coverage of the dispute placed the reclamation and water-treatment obligations at more than $100 million.
The objection resolved through settlement rather than a contested ruling. The debtors and PA DEP reached a cleanup agreement in April 2025 addressing the water-source obligations. As the later motion to dismiss explained, certain real property and environmental legacy obligations were excluded from the asset sales because the properties carried perpetual liabilities and were not saleable; those properties and some water-treatment equipment were transferred to water-treatment trusts as part of the PA DEP settlement.
The LCT Dispute and Three-Way Asset Auction
The debtors filed their 363 sale motion on January 16, 2025, seeking authority to sell all or substantially all assets — the mines, preparation plants, equipment, and contracts. No stalking horse was designated at filing, but the debtors sought authority to name one later, with bid protections capped at a 3% break-up fee and up to 2% expense reimbursement under a 5% aggregate cap. The motion proposed a compressed timeline, with a February 21 bid deadline, a February 24 auction, and a closing by month-end, and required qualified bidders to show financial capacity, address environmental obligations and replacement reclamation bonding, and post a 10% earnest-money deposit. The court entered the bidding procedures order on January 28, 2025.
The process turned contested. On February 25, 2025 the debtors filed an emergency motion accusing LCT Energy, LP of misusing confidential diligence information, contacting customers and counterparties with destabilizing messages, and using debtor data to interfere with trucking relationships, which the debtors said was impairing operations and sale value. The debtors withdrew that emergency motion on March 5, ahead of the auction. The auction itself was then paused for two weeks in mid-March after a spike in the value of the company's machinery.
On March 26, 2025 the debtors noticed three successful bids, splitting the estate among Rosebud Mining Company, KIA II, LLC, and LCT Energy, LP across three separate lots. The official committee of unsecured creditors filed a limited objection the same day. The committee did not challenge the Rosebud or KIA economics; it objected to the inclusion of possible "LCT Causes of Action" in the LCT transaction, arguing those claims had not been adequately disclosed, noticed, or tested under Bankruptcy Rule 9019. The committee's filing identified the three winning bids as Rosebud at $15 million, the DIP lender KIA II at $7 million, and a modified LCT bid at $1.5 million.
Judge Deller approved the sales through separate orders on March 28, 2025. The Rosebud sale order approved a $15 million cash purchase plus assumption of specified cure costs and liabilities, conveying the Acosta, Keyser, and Casselman deep mines, the Cambria Preparation Plant, related equipment, and specified contracts. The KIA II sale order approved a $7 million purchase of real property, inventory, machinery, and equipment across multiple Somerset County townships, and a separate order addressed the LCT lot. Both principal orders cleared the assets of liens and interests except for expressly assumed liabilities, provided that liens attached to net proceeds with existing validity and priority, and declined to treat the buyers as successors except as set out in the purchase agreements. The motion to dismiss later reported that all three sales closed on April 4, 2025, and a follow-on order affirmed a related Brothersvalley real-property sale on May 21.
With the sales closed and material assets transferred, the debtors chose dismissal over plan confirmation or chapter 7 conversion. The motion to dismiss, filed June 3, 2025, described dismissal as the cheapest and fastest remaining path: the estates retained only minimal residual assets, such as possible insurance refunds worth less than $500,000 in the aggregate, while KeyBank still held secured claims of about $7.42 million. With remaining value fully encumbered, the debtors said unsecured creditors would not benefit from further administration, and conversion to chapter 7 would add cost without creating recoveries. The motion also sought exculpation for case participants after the creditors' committee completed an investigation and declined to pursue further action against management. The court entered the order dismissing the cases on June 18, 2025, 164 days after the petition, with the exculpation provisions in place. Following the U.S. case wind-down and the July 2025 CCAA termination, Corsa Coal Corp. filed for assignment into bankruptcy under Canada's Bankruptcy and Insolvency Act on September 23, 2025; PricewaterhouseCoopers Inc. was appointed as the licensed insolvency trustee for the Canadian estate.
Professional retentions and fees. The debtors retained Raines Feldman Littrell LLP as counsel and BDO Consulting Group, LLC as financial advisor, both effective nunc pro tunc to the petition date, under a fee procedures order entered January 27, 2025. Raines sought final allowance of $1,866,000.50 in fees and $41,443.27 in expenses for January 6 through June 3, 2025, including a final requested payment of $278,306.55 after prior payments and holdbacks. The court's June 18 fee order allowed Raines $1,857,512.00 in fees and the full $41,443.27 in expenses, and authorized an additional payment of $269,818.05. BDO USA, P.C., retained separately as tax-services consultant, sought $124,000 after stated voluntary and administrative discounts. The official committee of unsecured creditors retained Dentons Cohen & Grigsby P.C. as counsel and Huron Consulting Services, LLC as financial advisor, and Canadian counsel Stikeman Elliott LLP obtained a final fee order in the Ontario proceeding.
Interim DIP order; foreign representative authorized for Canada
January 16, 2025
363 sale motion filed
January 28, 2025
Bidding procedures order and final DIP order entered
February 14, 2025
PA DEP environmental-compliance motion
February 24, 2025
PA DEP sale objection; Canadian recognition order
February 25, 2025
Debtors' emergency motion against LCT Energy
March 5, 2025
Debtors withdraw the LCT emergency motion
March 12, 2025
Auction paused two weeks after machinery value spike
March 26, 2025
Notice of successful bids; committee limited objection
March 28, 2025
Sale orders for Rosebud, KIA II, and LCT lots
April 4, 2025
All three sales close
June 3, 2025
Motion to dismiss filed
June 18, 2025
Order dismissing the chapter 11 cases
July 18, 2025
Canadian CCAA recognition proceeding terminated
September 23, 2025
Corsa Coal Corp. assigned into bankruptcy under Canada's BIA; PwC Canada appointed trustee
Frequently Asked Questions
What is Wilson Creek Energy, and how does it relate to Corsa Coal?
Wilson Creek Energy, LLC was the principal U.S. operating subsidiary of Corsa Coal Corp., a Canadian company whose shares traded on the TSX Venture Exchange and OTCQX. Wilson Creek mined metallurgical coal at underground and surface operations in Somerset County, Pennsylvania and Garrett County, Maryland, supplying steel-industry customers including U.S. Steel and Cleveland-Cliffs, and reported roughly 365 employees and about one million tons of annual production at filing.
Why did Wilson Creek file for bankruptcy?
Management attributed the January 2025 filing to geological problems that began in late 2023, depressed metallurgical coal pricing that fell below mining costs in 2024, and limited access to capital. A planned USDA-backed refinancing of its KeyBank facility did not close in time, leaving the company with about $1.2 million of cash against a $1.4 million payroll obligation, and it filed to pursue a prompt asset sale.
Who bought Wilson Creek's mines and assets?
The estate was split among three buyers at the March 2025 auction. Rosebud Mining Company paid $15 million for the Acosta, Keyser, and Casselman mines and the Cambria Preparation Plant; KIA II, LLC, the debtors' DIP lender, paid $7 million for real property and equipment in Somerset County; and LCT Energy, LP paid $1.5 million for a third lot. KIA II's interest in its purchased assets was later assigned to Elk Horn Equipment Sales and Services, LLC, identified in later filings as KIA II's successor.
What happened to the employees?
The debtors issued WARN Act notices to more than 400 workers across Pennsylvania and Maryland in March 2025 and faced a potential class action over the notices. Rosebud Mining retained roughly 50 former Corsa employees, primarily at the Casselman mine in Maryland.
What were the environmental issues in the case?
The Pennsylvania Department of Environmental Protection objected to the sale and pressed for compliance with state mining law, citing more than $100 million in reclamation and water-treatment obligations. The dispute settled in April 2025; legacy properties carrying perpetual liabilities were excluded from the sales and, together with certain water-treatment equipment, transferred to water-treatment trusts under the settlement.
Who is the claims agent for Wilson Creek Energy?
Omni Agent Solutions, Inc. serves as the claims and noticing agent, retained at the outset of the jointly administered cases to maintain the claims register across the eleven debtor estates. Because the cases were dismissed after the sales rather than confirmed, distributions ran through the secured and administrative structure rather than a plan.
This article was researched and written with AI assistance, using court filings, public records, and news sources. AI-generated content can contain errors. Verify all information against primary sources before relying on it. This is not legal or financial advice. Read our full disclaimer.
