A coal company operating in Eastern Kentucky and Virginia has filed for Chapter 11 bankruptcy after recently furloughing and laying off workers.
Clintwood JOD LLC, based in Pike County, received temporary protection from collections after a federal bankruptcy judge froze actions against the company Monday. The move allows the company to restructure its debts while continuing operations.
An affiliated mineral properties firm also filed for bankruptcy alongside Clintwood JOD.
According to state business records, the company employs more than 100 workers. Typically, that would require a 60-day notice before mass layoffs, but the company appears to be using an exception for unforeseeable circumstances. Employees initially shared furlough notices on social media late last month, which were later replaced by permanent layoff notices in early March.
The total number of workers affected remains unclear.
Court filings show the company reported assets between $100 million and $500 million, with more than $60 million in liabilities. Creditors include a New Jersey hedge fund owed $26.6 million, $8.9 million in equipment-related debt to a financial services firm, and $3.4 million owed to Kentucky in coal severance taxes.
More than 300 creditors were notified in the bankruptcy filing. Officials indicated unsecured creditors are unlikely to recover funds after the company restructures its debts. A creditors meeting is scheduled for April 16.
Company representatives did not immediately respond to requests for comment Tuesday.
Industry challenges, including rising production costs and increased competition from natural gas, have contributed to a nationwide decline in coal production of about 50% since 2008. Lower natural gas prices driven by expanded fracking in regions such as Texas and Pennsylvania have intensified the pressure. Efforts to revive the coal industry, including proposals to support coal-fired plants and boost domestic steel production, have had limited impact.
Clintwood JOD’s primary creditor is owned by a mergers and acquisitions firm that previously assumed reclamation fees and employee obligations from Cambrian Coal after its 2019 bankruptcy. That development reflects ongoing fallout from a broader mining industry downturn that left many miners unemployed.
Cambrian Coal, Blackjewel LLC, and Blackhawk Mining LLC all filed for Chapter 11 bankruptcy in 2019—the same year Clintwood JOD was formed and acquired more than 72 million tons of unmined coal reserves.
The acquisition also left Clintwood JOD with environmental violations that limited its ability to obtain mining permits. The Kentucky Energy and Environmental Cabinet is listed among its creditors.
Despite these challenges, the company expanded its operations to supply steel, activated carbon, and ferroalloy producers, while also producing thermal coal for power generation. In Pike County, it operated seven underground mines and two surface mines feeding a preparation plant in Feds Creek.
Along with another preparation plant in Virginia, the company managed 12 underground mines and four surface operations, which had been expected to outperform competitors before the pandemic disrupted the coking coal market.
Leave a Comment