Corsa Coal Corp. et al., CCAA

Corsa Coal Corp. et al., US-based companies which operate a deeply integrated premium quality metallurgical coal business, had their Chapter 11 proceedings recognized under the CCAA on January 14.

The companies own, lease and/or operate six underground and surface mines, including five in Pennsylvania. They employ approximately 365 people across their mines and a coal preparation plant, also located in Pennsylvania.

The companies cite geological challenges, deteriorating coal prices and inadequate access to capital as the primary reasons behind the liquidity challenges they began experiencing in the fourth quarter of 2023. Specifically, they were developing new mining areas in their underground mines and encountered challenging geological issues that reduced output and increased costs. Concurrently, they were unable to access adequate capital to repair and rebuild mining equipment or purchase new equipment necessary to operate their mines.

The companies attempted to negotiate with KeyBank National Association, their primary secured creditor owed $16.3 million, and tried to refinance the loan. They also worked with an investment banker in mid-2024 to explore merger and sale options. No material transaction was achieved from these efforts, and the companies’ losses are mounting (over US$20.3 million for the 9 months ended September 30, 2024).

The purpose of the companies’ cross-border restructuring proceedings is to stabilize operations and conduct a sales process.

PwC is the information officer.

KIA II LLC is providing a DIP loan.

Counsel is Stikeman Elliott (Canadian counsel) / Raines Feldman Littrell (US counsel) for the companies; Fasken for the monitor; Tucker Arsenburg (US counsel) for the DIP lender; and Squire Patton Boggs (US counsel) for KeyBank.