Cumberland Coal Corporation - Chapter 11 Bidding Procedures Summary

Bidding Procedures / Asset Purchase Agreement Summary

Stalking Horse Bid

• Purchase price: a section 363(k) credit bid of the DIP obligations, plus the assumption of certain liabilities and obligations specified in the stalking horse APA, for substantially all of the sale assets.
• The bidder is CC Reclaim, LLC, the debtors' court-approved DIP lender. It holds no coal leases, does not presently intend to conduct mining operations and intends to seek transfer of the debtors' permits to perform reclamation and permit compliance; the procedures classify its bid as a reclamation transaction.
• Every qualified bid must pay the DIP obligations in full in cash at closing, other than any amount the DIP lender credit bids. For that reason, the procedures value the stalking horse bid at the DIP obligations outstanding as of closing.
• The court entered the bidding procedures order on Oct. 30, 2026, on the debtors' Oct. 20 expedited motion (ECF No. 10). The order authorizes the debtors to enter into the stalking horse APA, as amended at ECF No. 48, and treats the stalking horse bid as a qualified bid; the U.S. Trustee's office endorsed the order as "seen and no objection."
• If no other qualified bid arrives by the Dec. 7 bid deadline, the auction is canceled and the stalking horse bid goes forward as the prevailing bid at the sale hearing. The bid is irrevocable only as and to the extent the stalking horse APA provides.

Parties

• Cumberland Coal Corporation and Cumberland Coal Investments, LLC are the sellers, with Cumberland Coal Corporation the counterparty to the stalking horse APA.
• Woods Rogers Vandeventer Black PLC is the debtors' proposed counsel and the point of contact for bidders.

Assets Being Sold

• Substantially all of the debtors' assets, sold free and clear of all liens, claims, encumbrances and other interests, either as a whole or in lots.
• The assets acquired under the stalking horse APA consist principally of:
  • the debtors' equipment;
  • their coal mining permits;
  • their rights, if any, to enter and use the permitted lands for reclamation and permit compliance;
  • prepaid expenses and any residual interest in collateral held by the reclamation sureties, subject in all respects to the sureties' rights, including setoff and recoupment, and without any determination that the collateral is estate property;
  • books and records, with related privileges, to the extent the APA provides; and
  • claims and causes of action, other than lien challenges as defined in the stalking horse APA.
• The stalking horse bid assumes no leases or executory contracts. Cumberland Coal holds no unexpired coal leases: its coal mining lease with ACIN, LLC and its coal lease with Penn Virginia Operating Co., LLC were both terminated before the petitions were filed.
• Bidders may bid on all or part of the assets, allocating price and assumed liabilities by lot, but any qualified bid, alone or together with others, must cover every permit. Cumberland Coal would prefer a single purchaser but will seek approval of multiple sale transactions, including prevailing bids for different lots, if it determines that doing so maximizes estate value. Those transactions must together satisfy the permit, bonding and DIP payoff requirement described below.

Bid Protections

• None. The order bars any break-up fee, expense reimbursement or other bid protection for CC Reclaim, but does not limit payment of the DIP obligations under the DIP orders.

Credit Bid

• CC Reclaim, as DIP lender, may credit bid all or any portion of the DIP obligations under section 363(k) and the DIP orders. It needs no deposit, proof of claim or further evidence of financial capacity.
• Any other lienholder may credit bid only:
  • to the extent its lien is valid, perfected, unavoidable and not subject to a pending or timely challenge, as agreed by the debtors or determined by the court before the auction;
  • against the assets subject to its lien; and
  • if its bid pays all DIP obligations and all liens senior to its own in full in cash at closing.
• Such a bid must otherwise meet every bid requirement, including the permit, bonding and DIP payoff requirement. The bidder must also provide evidence of the validity, amount and priority of its secured claim.

Overbid

• Initial overbid: at least $50,000 above the value of the stalking horse bid, which the procedures set at the DIP obligations outstanding as of closing.
• Minimum overbid increment: $50,000. Each successive auction bid must carry an actual cash price, or credit bid, that beats the then-highest bid by at least that amount.
• Consideration an operating-path bidder pays to coal lessors or landowners does not count toward the opening bid or any overbid.

Good Faith Deposit

• Deposit: 10% of the proposed purchase price, in cash, by cashier's check payable to debtors' counsel or by wire to counsel's trust account; the DIP lender is exempt.
• The debtors may keep the prevailing bidder's deposit as liquidated damages if it fails to perform. All other deposits are refunded when a sale order is entered, except the backup bidder's, which is refunded when the prevailing bidder closes.
• Return of its deposit is a bidder's only recourse against Cumberland Coal, the debtors' agents or representatives, or the estates.

Key Dates

• Bidding procedures order entered: Oct. 30, 2026
• Assumption and assignment notice service: within 5 business days after entry of the order
• Proposed assumed contracts notice: no later than 10 business days after entry of the order
• Contract objection deadline: 14 days after service of the assumption and assignment notice
• Bid deadline, including proof of financial and regulatory ability: Dec. 7, 2026, at 5 p.m. (prevailing Eastern Time)
• Qualified bid notification: no later than one business day before the auction
• Auction (if needed): Dec. 10, 2026, at 10 a.m. (prevailing Eastern Time)
• Notice of prevailing and backup bids: Dec. 11, 2026
• Sale objection deadline: Dec. 11, 2026
• Adequate assurance objection deadline: Dec. 14, 2026
• Sale hearing: Dec. 16, 2026, at 9 a.m. (prevailing Eastern Time), via the court's Zoom for Government platform, as set by the order; the attached procedures and contract notice left the time and location for the court to fix
• Outside closing date: Dec. 18, 2026, or a later date the DIP lender agrees to in writing

Two Transaction Paths

• Cumberland Coal will take bids on either a reclamation path or an operating path. It will weigh the two against each other and against the stalking horse bid using the auction selection factors, and may choose a bid on either path as the prevailing or backup bid, subject to court approval.
• A reclamation transaction is a bid for the permits and related assets in order to perform the associated reclamation and permit-compliance obligations. The stalking horse bid is a reclamation transaction, and other bidders may also bid on this path.
• An operating transaction is a bid for the permits and related assets in order to conduct mining. Cumberland Coal holds no coal leases, and the reserves and related surface and access rights are owned by ACIN, LLC, Penn Virginia Operating Co., LLC and others, so an operating bidder must arrange its own mining rights before the bid deadline. Its bid must include:
  • evidence reasonably satisfactory to Cumberland Coal that it has executed, or agreed on the final form of, the coal mining leases and surface and access agreements its operations require with each applicable lessor or owner, effective subject only to its selection as prevailing bidder and the closing of its purchase; and
  • a description of the material terms of those agreements, including any consideration payable to a lessor or owner on account of the debtors' prepetition obligations or otherwise.
• Any such lessor consideration is the bidder's sole obligation, is not paid from the estates and does not count as consideration toward the overbid. The debtors will not accept an operating-path APA that fails the operating-path requirements or the permit, bonding and DIP payoff requirement, and they encourage operating bidders to submit well ahead of the bid deadline.

Permit, Reclamation and Bonding Requirements

• No sale may be approved unless the bid takes all of the debtors' coal mining permits and their reclamation obligations, bonds them and pays the DIP obligations in full in cash. The bid may meet this alone or as a combined bid, meaning together with other bids the debtors determine can be consummated together. Specifically, the bid must:
  • acquire all, and not less than all, of the permits, assume all associated reclamation and environmental obligations, and replace all associated reclamation surety bonds, or satisfy them in another way acceptable to the applicable regulator, no later than transfer of the applicable permit;
  • be accompanied by either binding written commitments from one or more sureties to issue replacement bonds for all permits, or written agreements from the existing sureties to keep their bonds in place pending transfer and to issue, or let another surety issue, the bonds required on transfer. Under the second option, the bidder takes on permit compliance, reclamation and bond maintenance (including premiums) from closing under a permit transfer agreement acceptable to the sureties. Either way, the bid must include evidence that no bidder is permit blocked; and
  • pay all DIP obligations, including the DIP lender's fees and expenses, in full in cash at closing, or, for a combined bid or multiple sale transactions, at or before the first closing, other than any amount the DIP lender credit bids.
• No person owning or controlling a bidder may be listed in the Office of Surface Mining Reclamation and Enforcement's Applicant Violator System with outstanding violations that could leave it permit blocked by the applicable state regulator. Bidders must also give preliminary proof that they can obtain all necessary governmental, licensing and regulatory approvals.
• Regulators with authority over the permits include the Kentucky Energy and Environment Cabinet, the Virginia Department of Energy and the Office of Surface Mining Reclamation and Enforcement.

Bid Requirements

• Bids are due to debtors' counsel by 5 p.m. (prevailing Eastern Time) on Dec. 7, 2026. No bid may carry a financing contingency left unresolved before the auction or a diligence condition after the bid deadline. Among other things, a qualified bid must:
  • be a good-faith, bona fide written offer, signed by an authorized representative and irrevocable through closing of the sale to the prevailing bidder;
  • identify the assets, including associated permits, the purchase price and all liabilities to be paid or assumed, allocated by lot where the bid covers more than one;
  • be payable in cash in U.S. dollars, unless credit bid by a qualified credit bidder;
  • demonstrate, to Cumberland Coal's reasonable satisfaction, the legal capacity and financial resources to close before close of business on Dec. 18, 2026, such as cash on hand or a binding financing commitment from an established financial institution or investment fund, and include governing-body authorization;
  • include clean and marked APAs showing changes from the stalking horse APA or from Cumberland Coal's form APA, which is available in the data room rather than on the docket;
  • disclose the bidder's ownership and capital structure, including beneficial owners, ultimate beneficial owners and controlling entities, and identify its authorized representatives;
  • consent to the bankruptcy court's exclusive jurisdiction; represent that the bidder is not acting as a broker, finder or agent and that Cumberland Coal has agreed to pay no brokerage commission or finder's fee on its behalf; and keep the bid confidential before the auction; and
  • exceed the value of the stalking horse bid by at least $50,000.
• Cumberland Coal will tell bidders whether they qualify no later than one business day before the auction. It may work with bidders to cure deficiencies, and bidders may amend nonqualifying bids up to the auction date.

Auction

• Dec. 10, 2026, at 10 a.m. (prevailing Eastern Time), virtually or in person at Woods Rogers Vandeventer Black PLC's offices in Roanoke, Virginia, if Cumberland Coal receives more than one qualified bid; with only one, no auction is held. In-person attendees must give the debtors' counsel at least one business day's notice, and Cumberland Coal may postpone or continue the auction by filing a notice.
• Only qualified bidders, including the stalking horse bidder and any credit bidders, may bid. The debtors, the U.S. Trustee, the DIP lender, any committee representative and other parties in interest may attend.
• Bidding opens with the highest qualified bid, which must be at least the stalking horse value plus $50,000, and proceeds in $50,000 increments. All bids are made on the record in the presence of all qualified bidders, and each bidder must confirm on the record that it has not colluded. Any auction rules the debtors announce must be consistent with the procedures, including the DIP lender's consent rights.
• In choosing the prevailing bid, Cumberland Coal will weigh:
  • price;
  • form of consideration, including credit bid;
  • likelihood, timing and barriers to closing;
  • variations between bids;
  • impact on contract counterparties;
  • benefits to the estates, creditors and other stakeholders, including the value of reclamation and environmental obligations included in or excluded from a bid; and
  • any other factors the debtors deem relevant.

Prevailing and Backup Bids

• Cumberland Coal selects the prevailing bid in its sole discretion, subject to court approval, and may designate one or more backup bids. The debtors may also decline to name a prevailing bid if doing so is not in the estates' best interests.
• Prevailing and backup bidders must sign their transaction documents immediately after the auction, and each prevailing bidder must sign an amended APA and related sale documents before the sale hearing.
• If the prevailing bidder fails to close, the debtors may deem the backup bid the prevailing bid and move for an amended sale order without giving any party notice or an opportunity to object. Separately, if a prevailing bidder other than CC Reclaim fails to close, the debtors may designate CC Reclaim as prevailing bidder and close under the stalking horse APA.
• Presenting a prevailing bid to the court is not acceptance; the debtors accept a bid only when the court approves it in a sale order.

Closing

• Outside date: Dec. 18, 2026, or a later date the DIP lender agrees to in writing, unless the court orders otherwise for cause. Closing follows entry of the sale order.
• Any cash portion of the price is wired to debtors' counsel's trust account. Unless the DIP lender is the prevailing bidder, the DIP obligations are paid in full in cash at closing by wire directly to the DIP lender.

DIP Lender Consent Rights

• The debtors need the DIP lender's prior written consent to waive or modify any of the following, or any right of the stalking horse bidder or DIP lender under the procedures:
  • the permit, bonding and DIP payoff requirement;
  • the requirement that every bid exceed the stalking horse bid's value, set at the DIP obligations, by the minimum overbid amount;
  • the credit-bid provisions; and
  • the direct cash payoff of the DIP obligations at closing.
• Subject to that limit, the debtors may modify the procedures at or before the auction, including by extending deadlines, changing bid increments, waiving or adding terms for any bidder, and adjourning or canceling the auction or sale hearing.

Assumption and Assignment

• The stalking horse bid assumes no contracts. Cumberland Coal may assume and assign executory contracts, if any, that a prevailing bidder designates. Potentially assignable contracts are listed on Schedule 1 to the assumption and assignment notice, and proposed cure costs on Schedule 2.
• Objections to assumption, assignment or cure are due 14 days after service of the notice, and adequate assurance objections to the prevailing bidder are due by Dec. 14, 2026. A counterparty that does not object on time is deemed to consent to assumption, assignment and adequate assurance; the scheduled cure costs then bind it and bar any other claims against the debtors or the prevailing bidder.
• Unresolved objections may be heard at or after the sale hearing. An adjourned objection may be resolved after closing if the sale transaction funds a cash reserve equal to the cure amount the counterparty reasonably believes is owed. Once the objection is resolved and any cure is paid, the contract is deemed assumed and assigned as of closing.
• The debtors may drop a contract if an objection is resolved in a way that is not in the estates' best interests. Before closing, they may also amend the contract notices or cure amounts; counterparties that are added, or whose cure is reduced, get 14 days from service to file a contract objection and until the earlier of 14 days from service or the sale hearing to raise an adequate assurance objection, which they may make on the record at the hearing if that date comes first. Listing a contract is not an admission that it is executory or that it was not terminated before the petition date, and prevailing bidders keep any APA right to exclude contracts before closing. Absent a consummated sale and a sale order approving the assignment, contracts are deemed neither assumed nor assigned.

Due Diligence and As-Is Sale

• Qualified bidders get reasonable diligence access after signing a confidentiality agreement satisfactory to Cumberland Coal.
• The assets are sold as is, where is. Each qualified bidder is deemed to acknowledge that it had the opportunity to conduct diligence, relied solely on its own review, and did not rely on any written or oral representation, warranty or guaranty about the assets or the completeness of information provided.