Clintwood JOD - Chapter 11 Case Summary

Business Description

Headquartered in Belcher, KY, Clintwood JOD, LLC and JOD Mineral Properties, LLC (collectively, the "Debtors") are coal mining entities operating surface and underground mining on leasehold interests in Pike County, Kentucky and in surrounding areas in Wise and Buchanan Counties, Virginia. JOD Holdings, LLC, a non-debtor entity, is the sole member of both Debtors.

• Clintwood JOD, LLC ("Clintwood") handles all mining activities and owns or controls most operating assets, including mining equipment, two wash plants, two load-outs, refuse impoundments, and permits.
• Through the coal leases held by JOD Mineral Properties, LLC, the Debtors have secured access to approximately 60 million recoverable tons of clean coal, primarily high volatile bituminous and some thermal coal.

On March 22, 2026 (the "Petition Date"), the Debtors filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court for the Eastern District of Kentucky, London Division. The Debtors are continuing to operate their businesses as debtors in possession pursuant to 11 U.S.C. §§ 1107 and 1108.

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Corporate History

The Debtors and their non-debtor parent, JOD Holdings, LLC, were formed in 2019 to acquire and operate substantial coal mining assets, many of which were previously the subject of a prior case before this Court involving Cambrian Coal.

Change of Control

• In late 2024, Richmond Hill Capital Partners, L.P. and Essex Equity Joint Investment Vehicle, LLC (collectively, "Richmond Hill"), the then-owners of JOD Holdings, LLC through their affiliate ER JOD Holdings LLC, began negotiating a membership purchase agreement for the membership interests of JOD Holdings, LLC and its subsidiaries and began working through change of control issues.
• In September 2025, all equity interests of JOD Holdings, LLC were acquired by Mine & Rail Corporation, a Delaware corporation.
• Following the acquisition, Mine & Rail Corporation provided funding for the Debtors' operations utilizing funds from Tacora Capital, LP ("Tacora").

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Operations Overview

Clintwood operates both surface and underground mining on leasehold interests in Pike County, Kentucky and the surrounding areas of Wise and Buchanan Counties, Virginia. The Company's coal reserves, accessed through leases held by JOD Mineral Properties, LLC, encompass approximately 60 million recoverable tons of clean coal, primarily high volatile bituminous and some thermal coal.

Workforce

• Clintwood currently employs approximately 56 salaried employees, paid bi-weekly with an approximate gross payroll (including taxes) of $280,000.
• Clintwood withholds and/or pays funds for state, federal, and applicable local withholding taxes, as well as other benefits.
• Clintwood could not easily replace Employees in the current labor market and would likely not be able to continue to operate its business if Employees stopped working.

Banking

• Clintwood maintains six bank accounts at Community Trust Bank and one bank account at Truist Bank, all of which are insured by the Federal Deposit Insurance Corporation (FDIC).

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Prepetition Obligations

The Debtors' prepetition capital structure includes the following obligations:

Senior Secured Credit Agreement

• ER JOD, LLC, a Delaware limited liability company affiliated with Richmond Hill, serves as administrative agent and collateral agent for the lenders under a Senior Secured Credit Agreement dated November 12, 2019, as amended through a Thirteenth Amendment dated September 2, 2025 (the "Prepetition Credit Agreement").
  • The Debtors serve as borrowers under the Prepetition Credit Agreement, with ER JOD Holdings A LLC, ER JOD Holdings B LLC, and ER JOD Holdings C LLC — each an affiliate of Richmond Hill — serving as lenders.

Richmond Hill Seller Note

• In connection with the September 2025 sale of membership interests, Richmond Hill retained a $25 million seller note (the "Richmond Hill Note") secured by a blanket lien on substantially all assets of the Debtors.

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Events Leading to Bankruptcy

Collapse of Post-Acquisition Capital Structure

Following Mine & Rail Corporation's September 2025 acquisition of JOD Holdings, LLC, the Debtors relied on Mine & Rail Corporation for operational funding, which in turn was sourced from Tacora Capital, LP. In February 2026, Tacora filed suit against Mine & Rail Corporation and related parties in the U.S. District Court for the Eastern District of Kentucky (Case No. 6:26-cv-00086-KKC) (the "Tacora Action"), alleging fraudulent misrepresentation and omission. Specifically, Tacora alleged that the defendants concealed Mine & Rail Corporation's insolvency while inducing Tacora to fund $30 million in loans and convertible notes, and misrepresented that Tacora would be granted certain liens against assets it was unable to provide.

• The Debtors are not parties to the Tacora Action.
• The Tacora Action effectively cut off Mine & Rail Corporation's ability to fund the Debtors' ongoing operations.

Square's Escalating Actions and Payment Withholding

Clintwood JOD, LLC is a party to a Master Coal Purchase and Sale Agreement with Square Resources US, LLC ("Square"), which served as the sole conduit for the Debtors' revenue. Shortly after the initiation of the Tacora Action, Square issued a notice of default and force majeure, further restricting the Debtors' revenues. Square also ceased marketing the sale of the Debtors' coal and issued a force majeure notice directly to the Debtors' customers, disrupting existing customer relationships.

• Beginning in late February 2026, Square commenced a series of escalating notices and payment suspensions that directly caused and materially contributed to the Debtors' liquidity crisis:
  • Square began withholding payments owed to the Debtors for coal that had already been mined, shipped, and sold to end customers, depriving the Debtors of the working capital necessary to continue operations.
  • The Debtors were forced to idle mining operations on February 23, 2026.
  • Square issued a Material Adverse Change notice on February 25, 2026, an Event of Default notice on March 5, 2026, and a Force Majeure declaration on March 6, 2026 — each predicated on the consequences of Square's own conduct.
  • On March 12, 2026, Square formally suspended all payments to the Debtors while simultaneously acknowledging that it owed the Debtors approximately $2,476,271 for coal already mined, shipped, and sold.
• Square also claims ownership of approximately 78,000 tons of coal stockpiled at the Debtors' mine sites under the Warehouse and Collateral Agreement (the "WCA"). The Debtors believe the WCA functions as a disguised security interest rather than a true sale, as evidenced by its lending terminology — including advance rates, drawdowns, repayments, funding caps, and an 18.5% interest rate — and assert that Square has not perfected any security interest under the Uniform Commercial Code. The Debtors hold substantial additional coal inventories beyond Square's claim.
• Compounding these pressures, the price of coal is historically cyclical and is currently at the low end of the price range.

Abandonment by Parent and Chapter 11 Filing

Following the collapse of Mine & Rail Corporation's capital commitments and Square's suspension of payments, the Australian-based directors and officers of Mine & Rail Company Pty Ltd ("MRCo AU"), who had controlled the Debtors' parent company since the September 2025 acquisition, ceased providing operational oversight, capital, or direction and effectively abandoned the Debtors. MRCo AU subsequently entered voluntary administration in Australia, leaving the Debtors operationally orphaned with no functioning ownership above the local management level.

• Facing a complete liquidity crisis with no available capital and idled mining operations, the Debtors filed for Chapter 11 protection on March 22, 2026, seeking to preserve going-concern value while pursuing a sale of assets.
• The Debtors have arranged for debtor-in-possession financing from Capital Land Co., LLC ("Capital Land"), which requires a first-priority lien against the assets of both Debtors as a condition of funding.
  • Without the DIP financing, the Debtors are at risk of losing insurance coverage, having utility service cut off, losing security at mine sites, and having necessary equipment repossessed — actions that would substantially impair asset value and potentially expose the Debtors to theft or vandalism.