A U.S. district judge in Virginia has ordered that coal stockpiled on three Blackjewel LLC sites cannot be removed for now.
Last week, a bankruptcy judge in West Virginia was set to hear motions on a temporary agreement between the U.S. labor department and Blackjewel not to remove the coal.
But then Blackjewel argued that its customer for the coal, Blackjewel Marketing and Sales Holdings, should receive the goods as soon as possible because leaving the coal stockpiled outdoors will cause its value to fall.
Blackjewel Marketing and Sales Holdings is a separate firm not included in Blackjewel LLC’s Chapter 11 reorganization case.
The bankruptcy court has already approved an agreement for Blackjewel Marketing to pay Blackjewel LLC $1.4 million for the coal.
Bankruptcy Judge Frank Volk on Friday ordered an evidentiary hearing on the matter. Later that day, U.S. Judge James Jones of Virginia’s Western District issued a restraining order to make certain the coal is not moved. It will stay in place until Volk has heard additional evidence.
The labor department argues that since Blackjewel miners have not been paid for work done before the July 1 bankruptcy filing, the stockpiled coal is “hot goods” and cannot be transported offsite.
In a district court filing, the labor department applied for the restraining order.
According to court documents, more than 53,000 tons of clean coal and more than 4,200 tons of raw coal are stockpiled at the Pigeon Creek Processing facility near Stonega. Also, about 20,000 tons of metallurgical coal are stored at a site in Raven and about 16,800 tons are stored at a Honaker site.