The opinion
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
INRE:
KIMMEL'S COAL AND PACKAGING, INC., Case No. 18-bk-01609 (HWV)
MEADOWBROOK COAL COMPANY, INC., Case No. 18-bk-02506 (HWV)
MICHAEL COAL COMPANY, INC., Case No. 18-bk-02507 (HWV)
KIMMEL 'S POWER PLANT SERVICES, INC., Case No. 18-bk-02509 (HWV)
KIMMEL'S MINING COMPANY, INC. Case No. 18-bk-02510 (HWV)
Debtors-in-Possession Jointly Administered under
Docket No. 18-1609
FULTON BANK, N.A.,
Motion for Stay of Order Pending Appeal
Respondent/A ppellee
V.
RAUSCH CREEK LAND, L.P.,
Movants/A ppellant
MEMORANDUM DECISION
DENYING DEBTORS' MOTION FOR A STAY PENDING APPEAL
Before the Court is the Motion of Rausch Creek Land, L.P. ("Rausch Creek"), pursuant
to Federal Rule of Bankruptcy Procedure 8007, for a stay pending appeal of this Court's Order
(ECF No. 577) granting the Motion of Fulton Bank, N.A. ("Fulton Bank") to Compel
Compliance with Sale Order and For Declaratory Relief Regarding Security Interests of Fulton
Bank, N.A. (the "Motion to Compel")(ECF No. 369) in part and denying Fulton Bank's Motion
for Order of Contempt Against Rausch Creek (the "Motion for Contempt")( ECF No. 494).
Rausch Creek argues it is entitled to a stay because it has a substantial possibility of success on
appeal and will suffer irreparable harm if the Court denies them a stay (ECF No. 581).
Additionally, Rausch Creek asserts that granting a stay will not substantially harm either Fulton
Bank or the Pennsylvania Department of Environmental Protection ("PA DEP"), and the balance
of public interest concerns weighs in favor of the imposition of a stay (ECF No. 581). Fulton
Bank, the PA DEP, and the Chapter 7 Trustee, Markian R. Slobodian ("Trustee"), each oppose
the Motion, arguing that Rausch Creek is unlikely to succeed in its appeal, will not suffer any
irreparable injury without a stay, and have failed to show the granting of a stay is consistent with
public interests (ECF Nos. 590, 595, and 596).
For the following reasons, the Court finds that Rausch Creek has not met the standard for
a stay but agrees with Rausch Creek that there is a likelihood of success on the merits insofar as
the Court previously concluded that: (i) 25 Pa. Code § 86.56 (hereinafter "§ 86.56") was the only
way to effectuate transfer1 of the Permits,2 or the rights granted thereunder, pursuant to the APA
and Sale Order, (ii) Rausch Creek had to seek transfer of the Permits, or the rights granted
thereunder, pursuant to the APA and Sale Order under § 86.56, and (iii) reclamation liability
would be assumed by Rausch Creek as a matter of law pursuant to § 86.56. These findings do not
disrupt this Court's core holding in In re Kimmel's Coal & Packaging, Inc., No. 18-BK-01609
(HWV), 2021 WL 4458835 (Bankr. M.D. Pa. Sept. 28, 2021) (hereinafter "Kimmel's fl") that
under the plain terms of the parties' agreement, Rausch Creek was contractually obligated to
apply for and accept transfer of whatever portion of the Permits that it could even if that portion
is something less than 100%. Kimmel' s II, WL4458835, at * 10. The Court, therefore, suggests
that the proper remedy would be for this Court's Order in Kimmel' s II to be vacated and the
1 As will be further explained infra, the word "transfer" is a significant source of confusion in this case. Throughout
Kimmel 's I and Kimmel 's 11, the Court has construed the word "transfer" as a nontechnical term that ordinarily means
"to convey from one person, place, or situation to another" or simply "convey". Transfer, Merriam-Webster's
Collegiate Dictionary. https://www merriam-webster.com/-dictionary/transfer. In contrast, Rausch Creek appears to
believe the word "transfer" is technical in nature and should thus be given a technical meaning based on PA DEP's
interpretation of25 Pa. Code§ 86.56 ("Transfer of permit"). For present purposes, and unless otherwise noted, the
Court will continue to give the word "transfer" its ordinary non-technical meaning, which is "convey."
2 All capitalized terms used herein and not otherwise defmed in this Memorandum Order will have the meanings set
forth in Kimmel's I and Kimmel's II.
matter remanded to correct the above errors and to address the potentially unresolved ( and
primary) issue of responsibility for pre-existing reclamation liability.
I. JURISDICTION
The Court has jurisdiction over this contested matter pursuant to 28 U.S.C. §§ 157 and
1334, and the Amended Order of Reference entered to Middle District Docket No. 16-3. The
Court declares that Rausch Creek's Motion for a Stay Pending Appeal ("Motion for Stay"), and
the Responses filed thereto by Fulton Bank, the PA DEP, and the Trustee, create a core
proceeding for purposes of 28 U.S.C. § 157(b )(2)(A), over which this Court has constitutional
authority to enter a final judgment.
II. BACKGROUND
Rausch Creek's assertion that mining permits cannot be partially transferred under
Pennsylvania mining law is central to its Motion for Stay. This simple averment is difficult to
evaluate, however, without a shared interpretation of Pennsylvania mining law and a mutual
understanding of the word "transfer." Because a great deal of confusion seems to flow from the
latter, the Court will begin there.
A. Transfer
The importance of the meaning of the word "transfer" as used in this case cannot be
overstated as it is central to explaining the widely divergent positions taken by the Court and by
Rausch Creek. Indeed, this case is an example of the problems that can emanate from different
interpretations of a single word. As will be explained infra, in its simplest terms, throughout
Kimmel 's I and Kimmel 's II the Court has interpreted the word "transfer," particularly as it
appears in context in the AP A and Sale Order, as a nontechnical term that means "to convey
from one person, place, or situation to another" or simply "convey."3 Transfer, Merriam-
Webster's Collegiate Dictionary, https://www.merriam-webster.com/-dictionary/transfer; see
Kimmel' s II, 2021 WL 4458835, at *7 n.12. In contrast, and importantto understanding Rausch
Creek's position here, it appears Rausch Creek believes the word "transfer" in context in
the AP A is technical in nature and should be given a technical meaning based on the PA
DEP's interpretation of§ 86.56. If this is the case, the Court does not agree with Rausch
Creek's technical interpretation of the word "transfer," particularly as it relates to the
AP A. Likewise, Rausch Creek does not appear to agree with the Court's ordinary
interpretation of the word "transfer" as it relates to this case generally. Incredibly, until
the writing of this Memorandum it appears the Court and Rausch Creek were each
unaware of the other's different interpretation of this critical word. Since the different
meanings ascribed by the parties lead to such disparate conclusions in this case, this issue
(more than any other) explains why Rausch Creek and the Court seem to have
irreconcilable interpretations of the AP A, the Sale Order, the Stipulation, and the Court's
opinions in Kimmel' s I and Kimmel' s II.
B. Pennsylvania Mining Law
Another source of confusion in this matter flows from the interpretation and application
of Pennsylvania mining law, and particularly§ 86.56. Some of this confusion is sourced in the
different meanings given to the word "transfer" as described above. The rest of it comes from
different interpretations of Pennsylvania mining law, particularly § 86.56. The applicability of
3 In so doing, the Court applied the Ordinary-Meaning Canon, which provides "words are to be understood in their
ordinary, everyday meanings -unless the context indicates that they bear a technical sense." Antonin Scalia & Bryan
A. Garner, Reading Law: The Interpretation of Legal Texts 69 (2012); see also In re Piazza, 719 F.3d 1253, 1261
(11th Cir. 2013). Since the contextual use of the words, "transferable," "transferred," and "transfer" in the APA do
not bear a technical sense, the Court understands them in their ordinary, everyday meanings.
this section is important because if the Permits cannot be transferred under§ 86.56, then
reclamation liability will not follow as a matter of law pursuant to § 86.56(c )(2) and the issue of
who bears responsibility for the pre-existing reclamation on the Real Property may remain
unresolved.
In Kimmel' s I, the Court generally interpreted§ 86.56 as establishing the only method
available under Pennsylvania mining law to effectuate the transaction contemplated under the
AP A.4 See Kimmel' s I, WL 5576960, at *7, *9, n. 17. In Kimmel' s II, the Court interpreted§
86.56 more specifically as establishing the only method available under Pennsylvania mining
law for Rausch Creek to obtain some or all the rights to mine the Permitted Land as those rights
existed under the Permits on the date of Closing. See Kimmel's II, 2021 WL 4458835, at *8-10.
Rausch Creek seems to misunderstand the Court's general interpretation of§ 86.56 in Kimmel' s I
to mean that unless transfer of the Permits occurs pursuant to§ 86.56 exclusively, Rausch Creek
has no additional responsibility under the AP A to seek mining rights or assume reclamation
liability.5 Such an understanding is incorrect. This has become a significant source of confusion
in this case.
A second source of confusion regarding Pennsylvania mining law centers upon whether a
proper application of§ 86.56 allows for partial transfer of a mining permit. While the Court
expressly did not decide whether a permit can be transferred in part under § 86.56, it did hold
that Rausch Creek was obligated under the Sale Order and AP A to submit an application
pursuant to§ 86.56 seeking transfer of the Permits or as much of them as is possible. Kimmel's
4 The Court's reasoning for this interpretation was based upon the language of§ 86.56(a), which plainly states: "[a]
transfer, assignment or sale of the rights granted under a permit may not be made except as provided in this section."
Id. The Court interpreted this to mean just what it says on its face: to transfer, assign, or sell the rights under a permit
(which is what the parties were seeking to do under the APA), the procedures set forth in§ 86.56 are the only way to
do it.
5 This may explain why Rauch Creek withdrew its 2019 Application just 7 days after Kimmel 's I was issued.
Coal II, 2021 WL 4458835, at 9-12. The Court's reasoning was that it did not read anything in
the plain language of§ 86.56 or other provisions of Pennsylvania mining law that expressly
precludes such a transfer of a portion of the rights under a Permit.6 Kimmel 's Coal II, 2021 WL
4458835, at *9. By contrast, Rausch Creek cites to a PA DEP Technical Guidance
Memorandum, Permits Transfers for Coal and Noncoal Operators, Document Number 563-
2112-218, March 19, 2016 (the "TGM") in support of its proposition that mining permits cannot
be partially transferred. ECF No. 581 at ,r 2.7 The PA DEP agrees that partial mining permit
transfers are not allowed under§ 86.56. (ECF No. 595, ,r 5). If Rausch Creek and the PA DEP
are correct, then the Court acknowledges that§ 86.56 cannot be used to convey the Permits or
any of the rights thereunder due to the inaccessibility of the Dale Coal Land. See Kimmel's I, WL
5576960, at *9.8
In sum, the disconnect ( and here is where the concept of the different definitions of
"transfer" comes back into play) is that the Court never intended: ( 1) for the concept of a transfer
to mean a "legal transfer" of Permits under§ 86.56 as Rausch Creek may believe; or (2) to rule
on how transfers can be legally effectuated under Pennsylvania mining law or whether the
6 Because the Court did not read the plain language of§ 86.56 to unequivocally prohibit a partial transfer, the Court
essentially found that there was a possibility the PA DEP could approve such a transfer (which, for reasons discussed
infra remains true). Believing that such a partial transfer was possible and there was no other way to transfer the
permits, the Court ordered Rausch Creek to fulfill its obligations under the AP A by applying for a partial permit
transfer under§ 86.56. However, the Court expressly left it to the PA DEP whether to approve any such application,
which included a potential denial on the ground that § 86.56 does not permit partial transfers. This, again, highlights
the confusion over the word "transfer." The Court did not need to decide this legal issue of partial transfer under §
86.56 because it was only deciding that Rausch Creek had to fulfill its agreement to seek permits to conduct mining
activities on the Real Property (which the Court incorrectly thought had to be done under§ 86.56).
7 The TGM may be found on the docket at ECF No. 593. The TGM states that "[t]he boundary of the permit being
transferred must remain unchanged. Transfer of a portion of a mine permit will not be granted." TGM at § A(4).
However, the TGM also says that it does not have the effect oflaw and is not binding on this Court or the PA DEP.
To the contrary, the Memorandum itself expressly states that it should not be given the weight or deference of an
adjudication or a regulation. TGM at p. i. It also affords the PA DEP the discretion to deviate from it as circumstances
warrant. Id. Thus, even with the TGM, there remains the possibility that a partial transfer is permissible under§ 86.56.
8 But, once again, this issue may be irrelevant because the Court was not intending to hold that the parties had to
effectuate a "legal transfer" under§ 86.56, but only that Rausch Creek had to endeavor to obtain permits to conduct
mining activities on as much of the Real Property as it could. The Court's error was in believing the only way to
accomplish this was under§ 86.56.
Permits could be legally transferred under same. Indeed, the latter is irrelevant and unnecessary
to the Court's underlying rationale in both Kimmel 's I and Kimmel 's II. Instead, the Court was
looking at this matter holistically and as a commercial sales transaction, just as it did when it
approved the Sale Order (e.g., Rausch Creek (as Buyer) paid a sum of money to the Debtors (as
Sellers) in exchange for the Real Property and the ability to seek and obtain permission to
conduct mining activities on that land and the Dale Coal Land, along with certain concomitant
obligations). Thus, the Court was not concerned with how mining permits can be transferred
under Pennsylvania mining law provided there was some means to accomplish it (which the
Court incorrectly thought was§ 86.56). Instead, the Court focused on the fact that Rausch Creek
purchased the ability to seek and obtain permission to conduct mining activities on the Real
Property, including an obligation to assume the existing reclamation liability once it obtained a
permit. Where the Court erred is in concluding that the only way to consummate the commercial
transaction was pursuant to § 86.56. Importantly, the Court now recognizes that § 86.56 is not
the only method available under Pennsylvania mining law for Rausch Creek to obtain some or all
the rights to mine the Permitted Land as the parties have identified other means under
Pennsylvania mining law to accomplish this.9
In view of the foregoing, while the Court believes it correctly concluded in Kimmel's II
that pursuant to the AP A and Sale Order the parties agreed that Rausch Creek would apply for
transfer of as much of the Permits as it could in accordance with Pennsylvania mining law, 10 and
9 The PA DEP has stated that the parties' agreement can be effectuated under Pennsylvania mining law by having
Rausch Creek submit a new application requesting a permit for all portions of the land exclusive of the Dale Coal
Lands and then have the Debtors reduce the size of the existing (White Pine) permit to exclude the lands contained in
the new application. Indeed, it appears that this is precisely what Rausch Creek was seeking to do with its 2019
Application (previously defined in Kimmel's I as the "New Permit Application" and defined in Kimmel's II as the
"2019 Application").
10 See§ III(A) of Kimmel's //where the Court held that "the plain language of the Sale Order and APA unambiguously
demonstrates that the parties intended a transfer of the Permits, or the rights granted thereunder, from the Debtors to
Rausch Creek as contemplated in the PA DEP Regulations." Kimmel's 11, WL4458835, at *6.
that Rausch Creek was contractually obligated to apply for and accept transfer of whatever
portion of the Permits that it could even if that portion is something less than 100%, 11 the Court
now believes it was incorrect in concluding that: (i) § 86.56 was the only way to effectuate such
a transfer under the AP A and Sale Order; (ii) Rausch Creek had to seek a transfer as described in
Kimmel' s II under§ 86.56; and (iii) reclamation liability followed as a matter of law pursuant to
§ 86.56. Such a scenario does not disrupt this Court's holding in Kimmel 's II because the
intended transfer of the Permits or the rights granted thereunder (e.g., the intended underlying
commercial transaction) can still occur under the Pennsylvania mining law even if it cannot be
accomplished under§ 86.56.
With the above context in mind, the Court now turns to the instant Motion for Stay.
III. DISCUSSION
The determination of whether to grant a stay pending appeal requires consideration of the
following four factors under the Third Circuit's "sliding-scale" approach: (1) whether the stay
applicant has made a strong showing that he is likely to succeed on the merits; (2) whether the
applicant will be irreparably injured absent a stay; (3) whether issuance of the stay will
substantially injure the other parties interested in the proceeding; and (4) where the public
interest lies. In re Revel AC, Inc., 802 F.3d 558, 568-70 (3d Cir. 2015); Republic of Philippines v.
Westinghouse Elec. Corp., 949 F.2d 653, 658 (3d Cir. 1991). These factors must be balanced,
with the first two being most critical. In re Revel AC, Inc., 802 F.3d at 568. The Court will
address each of these factors in the order presented.
11 See § III(B) of Kimmel's II where the Court held that "under the plain terms of the parties' agreement, Rausch
Creek was contractually obligated ... to apply for and accept transfer of ... whatever portion of the Permits that it
could ... even if that portion is something less than 100%." Kimmel's II, WL4458835, at *10.
A. Likelihood of Success on the Merits
To establish the first factor,t here must be a '"reasonable chance, or probability,o f
winning."' In re Revel AC, Inc., 802 F.3d at 568-69 (q uoting Singer Mgmt. Consultants, Inc. v.
Mi/gram,6 50 F.3d 223,2 29 (3d Cir. 2011)). A "reasonable chance of winning ... need not be
more likely than not," Id. at 569,b ut it must be "significantly better than negligible." Id. at 571.
For the following reasons,w hile the Court agrees that it may have misapplied§ 86.56,t here is
not a likelihood of success on the merits concerning this Court's fundamental holding that,u nder
the AP A and Sale Order,R ausch Creek was contractually obligated to apply for and accept
transfer of whatever portion of the Permits that it could even if that portion is something less
than 100%.
1. First Issue Presented on Appeal
Rausch Creek's first issue presented on appeal asserts that the Court erred as a matter of
law or abused its discretion "in ruling that mining permits can be partially transferred under
Pennsylvania's mining permit transfer law." (ECF No. 594,P g. 1).
To the extent this issue is interpreted to mean the Court erred in ruling that mining
permits can be partially transferred under § 86.56 exclusively,t he Court concludes that Rausch
Creek has no likelihood of success. This is so because the Court did not make such a ruling. To
the contrary,t he Court expressly wrote that:
The Court is not deciding whether a permit can be transferred in part. The Court
only holds that under the Sale Order and AP A Rausch Creek is obligated to submit
an application pursuant to § 86. 56 seeking transfer of the Permits or as much of
them as is possible. Whether any such transfer ultimately is approved is within the
purview of the PA DEP and subject to applicable state law.
Kimmel' s Coal II, 2021 WL 4458835, at n.20.12 Thus, the language of Kimmel' s II contradicts
any assertion that the Court erred as a matter of law or abused its discretion in ruling that mining
permits can be partially transferred under§ 86.56. Likewise, to the extent this issue is interpreted
to mean the Court erred in ruling that mining permits can be partially transferred under the
Pennsylvania mining regulations, 25 Pa. Code §§ 1.1 et seq., the Court again finds no likelihood
of success on the merits. This is because the Court interpreted the word "transfer" as used in the
AP A and Sale Order to mean "convey." As such, the word ''transfer" is not limited to any
technical meaning or understanding under§ 86.56. Because the Permits or a portion of the rights
granted thereunder can clearly be "conveyed" from the Debtors to Rausch Creek as evidenced by
the 2019 Application and the representations of the PA DEP, Rausch Creek's argument to
contrary here must fail.
Notwithstanding the foregoing, however, the Court does find a likelihood of success on
the merits regarding Rausch Creek's first issue presented to the extent it raises concerns
regarding the Court's conclusions that: (i) § 86.56 was the only way to effectuate transfer
(conveyance) of the Permits, or the rights granted thereunder, pursuant to the AP A and Sale
Order; and (ii) Rausch Creek had to seek transfer of the Permits, or the rights granted thereunder,
pursuant to the APA and Sale Order under§ 86.56 only. As discussed above, however, any such
error does not negate the Court's primary holding that "under the plain terms of the parties'
agreement, Rausch Creek was contractually obligated ...t o apply for and accept transfer of ...
whatever portion of the Permits that it could ...e ven if that portion is something less than
100%." Kimmel' s II, WL4458835, at * 10.
12 See n.6 supra.
2. Second Issue Presented on Appeal.
Rausch Creek's second issue presented asserts the Court erred as a matter of law or
abused its discretion in "interpreting the Asset Purchase Agreement to require a partial transfer
of a mining permit in contravention of Pennsylvania's mining permit transfer law." (ECF 594, at
I). To the extent this issue is interpreted to mean the Court erred in interpreting the Asset
Purchase Agreement to require a partial transfer of a mining permit in contravention of 25 Pa.
Code §§ l.l et seq., the Court concludes that Rausch Creek has no likelihood of success for
several reasons.
First, Rausch Creek has failed to offer any argument challenging the Court's reasoning in
§ III(B) ofKimmel's If where it found that under the plain terms of the parties' agreement,
Rausch Creek was contractually obligated to apply for and accept transfer of whatever portion of
the Permits that it could even if that portion is something less than 100%. Kimmel's II,
WL4458835, at* IO. Second, and as with the first issue presented,t he Court interpreted the word
"transfer" in context in the APA and Sale Order to mean "convey." As such, the word "transfer"
is not limited to any technical meaning that Rausch Creek may believe is imposed by § 86.56.
Because the Permits or the rights granted thereunder can be partially "conveyed" from the
Debtors to Rausch Creek as evidenced by the 2019 Application and the representations of the PA
DEP and because Rausch Creek has failed to offer any argument challenging the Court's
reasoning in § III(B) of Kimmel' s II, Rausch Creek's argument here must fail.
Notwithstanding the foregoing, however,t he Court does find a likelihood of success on
the merits regarding Rausch Creek's second issue presented on appeal to the extent it raises
concerns regarding the Court's conclusions that: (i) § 86.56 was the only way to effectuate
transfer (conveyance) of the Permits,o r the rights granted thereunder,p ursuant to the APA and
Sale Order; and (ii) Rausch Creek had to seek transfer of the Permits, or the rights granted
thereunder, pursuant to the APA and Sale Order under § 86.56 only. As discussed above,
however, any such error does not negate the Court's primary holding that "under the plain terms
of the parties' agreement, Rausch Creek was contractually obligated ...t o apply for and accept
transfer of ...w hatever portion of the Permits that it could ...e ven if that portion is something
less than 100%." Kimmel 's II, WL4458835, at * 10.
3. Third Issue Presented on Appeal.
Rausch Creek's third issue presented asserts the Court erred as a matter of law or
abused its discretion in "placing the burden of proof upon Rausch Creek to show whether
a mining permit can be partially transferred." (ECF 594, at 1). To the extent this issue is
interpreted to mean the Court erred in requiring Rausch Creek to engage in a futile act
(e.g., apply for a transfer pursuant to§ 86.56 knowing it will likely be denied)13 the Court
concludes that Rausch Creek may have some likelihood of success. As noted in Kimmel 's
II, the Court does not read anything in the plain language of§ 86.56 that precludes a
"transfer, assignment, or sale" of a portion of the rights under a permit. Kimmel 's II, 2021
WL 4458835, at *9.14 However, the Court acknowledges that the PA DEP disagrees and
believes any such application under § 86.56 would likely be denied.15
In view of the foregoing, then, the Court does find some likelihood of success on the
merits regarding Rausch Creek's third issue presented on appeal to the extent it raises concerns
regarding the Court's conclusions that: (i) § 86.56 is the only way to effectuate a transfer
13 ECF No. 581, at 7, ,r 27,
14 See n.6, 7 supra.
15 The Court notes that resolution of this issue (e.g., whether partial mining permit transfers are allowed under§ 86.56)
is not necessary because it does not impact the Court' primary holding that "under the plain terms of the parties'
agreement, Rausch Creek was contractually obligated ... to apply for and accept transfer of ... whatever portion of
the Permits that it could ... even if that portion is something less than 100%." Kimmel's II, WL4458835, at *10.
(conveyance) of the Permits or the rights granted thereunder consistent with the AP A and Sale
Order; and (ii) Rausch Creek must seek such a transfer of the Permits, or the rights granted
thereunder, consistent with the AP A and Sale Order under § 86.56 as opposed to another means
permitted by state law.
4. Fourth Issue Presented on Appeal.
The Court does not find a likelihood of success on the merits regarding Rausch Creek's
fourth issue presented on appeal asserting the Court erred as a matter of law or abused its
discretion "in ruling that Rausch Creek was judicially estopped from asserting a mining permit
cannot be partially transferred." (ECF No. 594, at 1). Recall that to establish a strong likelihood
of success on the merits, there must be a "'reasonable chance, or probability, of winning."' In re
Revel AC, Inc., 802 F.3d at 568-69 (quoting Singer Mgmt. Consultants, Inc. v. Milgram, 650
F.3d 223, 229 (3d Cir. 2011)). Here, Rausch Creek has failed to plead a single fact or averment
or make any arguments in its Motion for Stay to support its assertion here.
In contrast, the record demonstrates that Rausch Creek previously acknowledged an
obligation to apply for and obtain the rights to mine a "portion" of the Permitted Land including
any reclamation liability attendant thereto in its Response to the Motion to Compel. See Rausch
Creek's Response to the Motion to Compel, ECF No. 381, ,r,r 11-16; see also Kimmel's II,
WL4458835, at *8.16 This acknowledgement was subsequently confirmed and clarified by
Rausch Creek in the Stipulation partially resolving the Motion to Compel and Rausch Creek's
response thereto, where Rausch Creek agreed to apply for and obtain the rights to mine the Real
16 Given the Court's interpretation of the word "transfer" and assuming the mining rights sought by Rausch Creek are
just as those rights existed under the Permits at Closing, the Court has always viewed this acknowledgment to apply
for and accept a partial conveyance of the rights granted under the Permits as a qualifying partial transfer of the
Permits under paragraph 2.l(c) of the APA. See Kimmel's I, WL 5576960, at *11, and Kimmel's 11, WL 4458835, at
*13.
Property (only) on or before July 15, 2019. Pursuant to the Stipulation, Rausch Creek submitted
its 2019 Application to the PA DEP on July 15, 2019 seeking the rights to mine the Real
Property Gust as those rights existed under the Permits at Closing) and assuming all reclamation
liability attendant thereto.17 Fulton Bank, the Debtors, the PA DEP, and the Court all relied upon
the foregoing representations made by Rausch Creek in its Response to the Motion to Compel,
the Stipulation, and the 2019 Application. See, i.e., Mot. to Compel Hr'g Tr. 17:19-24, 7:17-8:9,
9:16-21, 5:19-6:1, 11: 15-16, 12:20-25. As such, in Kimmel' s I, the Court was led to believe there
was not (a nd would never be) any dispute over the reclamation liability on the Real Property
because Rausch Creek had already submitted an application assuming that liability. However,
seven days after the Court issued Kimmel' s I, Rausch Creek withdrew the 2019 Application and
submitted the 2020 Application in which it did not assume all reclamation liability attendant to
the Real Property. This change may be due to Rausch Creek's misunderstanding of the Court's
general interpretation of the APA and§ 86.56 as described above. Nevertheless, Rausch Creek
should be estopped from changing its position as described in its Response to Motion to Dismiss,
the Stipulation, the 2019 Application, and as it represented to the Court at the Hearing on the
Motion to Compel.
Accordingly, the Court does not find a likelihood of success on the merits regarding this
issue.
B. No Irreparable Harm.
Rausch Creek also must demonstrate that irreparable injury is likely and not merely
possible in the absence of a stay. In re Revel AC, Inc., 802 F.3d at 569. Establishing irreparable
17 For the reasons previously stated, the Court views the 2019 Application as a partial conveyance of the Permits that
qualifies as a "transfer" under paragraph 2.l(c) of the APA. See n. 16, supra. Resubmitting this 2019 Application
would therefore satisfy the conditions of the Court's ruling in Kimmel's 11, with the obvious exception of requiring
Rausch Creek to submit an application pursuant to§ 86.56 (which the Court now recognizes as possibly incorrect).
harm requires showing that it is "more apt to occur than not." Id To demonstrate irreparable
injury, the movant must demonstrate "harm that cannot be prevented or fully rectified by a
successful appeal." United States v. Safehouse, 458 F. Supp. 3d 687, 691 (E.D. Pa. 2020) (citing
In re Revel AC, Inc., 802 F.3d at 568 (quoting Roland Mach. Co. v. Dresser Indus., 749 F.2d
380, 386 (7th Cir. 1984) (Posner, J.)). The "possibility that adequate compensatory or other
corrective relief will be available at a later date, in the ordinary course of litigation, weighs
heavily against a claim of irreparable harm." In re Revel AC, Inc., 802 F.3d at 571 (quoting
Sampson v. Murray, 415 U.S. 61, 90, 94 S. Ct. 937, 39 L.Ed.2d 166 (1974) (internal quotation
marks omitted)).
Here, Rausch Creek argues that this Court "has set [] Rausch Creek up for failure since
what it is ordering Rausch Creek to do is impossible." (ECF No. 581, at 8, if32). Rausch Creek
further argues that it "will have no legal recourse if it is forced to comply with this Court's order
and the PA DEP changes its previous opinion that the Permits cannot be transferred due to this
Court's (incorrect) order." (ECF No. 581, at. 8, if33). The Court rejects these arguments as
unpersuasive. To begin, even assuming Rausch Creek's first argument as stated above is true and
correct, it is not clear to this Court how the argument establishes (o r even articulates) "harm that
cannot be prevented or fully rectified by a successful appeal." Consider the possibilities: If the
PA DEP denies the § 86.56 Application ( as Rausch Creek believes it must under the law), then
Rausch Creek will have complied with this Court's Order with minimal effort and expense18 and
will not be automatically liable under the law for pre-existing reclamation. Alternatively, and
contrary to Rausch Creek's second argument identified above, if "the PA DEP changes its
previous opinion that the Permits cannot be transferred due to this Court's (incorrect) order" and
18 Rausch Creek already prepared and previously submitted an application (the 2019 Application) that would satisfy
the Court's Order in Kimmel's II.
approves the§ 86.56 Application, then Rausch Creek will be free to appeal that decision in
accordance with state law as any other aggrieved party is entitled to do. Any such successful
appeal will prevent the claimed harm of being forced to accept reclamation liability. ECF No.
581 at ,r 12.
Furthermore, as stated by the PA DEP in its Response to Rausch Creek's Motion for
Stay, "if the stay is not granted and Rausch Creek submits a new permit application or in the
alternative amends the 2020 permit application to comply with the Bankruptcy Court's ruling,
and later the District Court reverses the Bankruptcy Court's holding, the permit can be duly
revised pursuant to 25 Pa. Code§ 86.52. As such, Rausch Creek will suffer no irreparable harm
if a stay is not granted." (ECF No. 595. at 4, ,r 12).
Thus, as to this second factor, Rausch Creek has failed to demonstrate that any
irreparable injury is likely to occur in the absence of a stay.
C. Balance of Harms and Public Interest.
If an "applicant satisfies the first two factors, the traditional stay inquiry calls for
assessing the harm to the opposing party and weighing the public interest." In re Revel AC, Inc.,
802 F.3d at 569 (quoting Nken v. Holder, 556 U.S. 418, 435 (2009)). Courts must then weigh the
likely harm to the movant (absent a stay) (factor two) against the likely irreparable harm to the
stay opponent(s) if the stay is granted (factor three). Id. This is called the balancing of harms or
balancing of equities. Courts must also take into account where the public interest lies (factor
four)-in effect, how a stay decision has "consequences beyond the immediate parties." Id.
(quoting Roland Mach. Co. v. Dresser Indus., 749 F.2d 380, 388 (7th Cir.1984) (Posner, J.)).
Although the Court finds Rausch Creek has not satisfied the second factor (irreparable
harm), the Court nonetheless continues its analysis and finds that this third factor also is not
satisfied. Here, Rausch Creek begins by arguing that "entry of an order staying the Motion to
Compel Order will not cause substantial injury to the Debtors or any other party to this
proceeding." (ECF No. 581,a t 8, ,i 34). In support of this averment, Rausch Creek argues that
Fulton Bank will not be harmed "as reclamation takes years to undertake and PA DEP has not
demanded cleanup of the affected areas of the Permits." (ECF No. 581,a t 8, ,i 35). It also argues
that "[t]he allegation that the Bankruptcy Estate will have a large administrative claim is
disingenuous as such administrative claim existed on the day the Debtors were in bankruptcy and
had nothing to do with actions taken by Rausch Creek." (ECF No. 581,a t 9,,i 37). These
arguments are unpersuasive.
Regarding the first argument advanced by Rausch Creek,t he PA DEP advised the Court at
the November 9,2 021 hearing on the Motion for Stay (the "Stay Hearing") that granting a stay in
this matter would allow Rausch Creek to continue to pursue its 2020 Application which was
close to being approved. Stay Hearing at 12:30:42. PA DEP also advised that "what Rausch
Creek is proposing in the 2020 permit would possibly trigger the Department to call the [Fulton
Letters of Credit] because the old permit would have to be shrunk and that reclamation would
have to be done on the old permit." Stay Hearing at 11: 33:31. Based upon these representations,
the Court rejects Rausch Creek's first argument.
The Court also rejects Rausch Creek's second argument that the "administrative claim
existed on the day the Debtors were in bankruptcy and had nothing to do with actions taken by
Rausch Creek." (ECF No. 581,a t 9,,i 37). The Court rejects this argument because it i ores the
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obvious intervening and superseding circumstances associated with: (1) the sale of substantially
all the Debtors' assets; (2) the terms and conditions of the AP A (which Rausch Creek voluntarily
bound itself to); (3) the Sale Order approving each of those things (and the Court's findings
attendant thereto); and (4 ) the Court's findings and conclusions in Kimmel 's I and Kimmel 's II.
Significantly, this Court would never have approved the Sale Order if Rausch Creek was
obtaining the rights to mine the property without also accepting the existing reclamation
obligations.
Finally,r egarding the public policy element,t he Court agrees with the PA DEP's
assessment. In its Response to the Motion for Stay, the PA DEP observes:
Rausch Creek latches on to a technicality claiming that because the Permits[]
cannot be transferred in full under 25 Pa. Code § 86. 56, it should be relieved of all
reclamation obligations. This outcome is contrary to the intent of the parties as forth
in the Sale Order, the AP A, and the July 8, 2019 Stipulation and as evidenced by
the 2019 Permit Application[] and is contrary to public policy. To allow Rausch
Creek to be relieved of all reclamation obligations is contrary to the intent and
purpose of the sale process under bankruptcy law because it leaves the obligations
with the insolvent Debtors.
ECF No. 595,a t 4-5,i J 13.
For the foregoing reasons,R ausch Creek has failed to satisfy its burden of demonstrating
that a balancing of harms or balancing of equities in this matter favors issuing a stay pending
appeal. Rausch Creek also has failed to demonstrate that the absence of the stay will have
negative "consequences beyond the immediate parties." To the contrary, to the extent public
policy considerations are relevant here,t hey tend to favor denying the request for a stay for the
reasons stated above.
IV, CONCLUSION
In conclusion, the word "transfer" is a si ificant source of confusion in this case. The
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different meanings ascribed to this word explain the disparate conclusions reached by the parties
and explains why Rausch Creek and the Court seem to have irreconcilable interpretations of the
APA,t he Sale Order,t he Stipulation, and the Court's opinions in Kimmel 's I and Kimmel 's II.
The same is true,t hough to a lesser extent,r egarding the proper interpretation and application of
§ 86.56. With that context in mind, the Court finds that Rausch Creek has not met the standard
for a stay but agrees with Rausch Creek that there is a likelihood of success on the merits insofar
as the Court previously concluded that: (1) § 86.56 was the only way to effectuate transfer of the
Permits, or the rights granted thereunder, pursuant to the APA and Sale Order, (11) Rausch Creek
had to seek transfer of the Permits, or the rights granted thereunder, pursuant to the APA and
Sale Order under § 86.56, and (411) reclamation liability would be assumed by Rausch Creek as a
matter of law pursuant to § 86.56. The Court, therefore, suggests that the proper remedy would
be for this Court’s Order in Kimmel’s IT to be vacated and the matter remanded to correct the
above errors and to address the potentially unresolved (and primary) issue of responsibility for
pre-existing reclamation liability.
For the foregoing reasons, Rausch Creek’s Motion for Stay Pending Appeal is denied. An
appropriate order will follow.
Dated: December 3, 2021 By the Court,
Henry W. Van Eck, Chief Bankruptcy Judge ™®
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