WV Suing Alpha Natural Resources; Company "Overlooked" 100 Million In Debt In Bankruptcy Filing
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Here’s the short version: Last year, Kingsport, Tennessee-based Alpha Natural Resources (one of the big three US coal companies, along with Peabody and Arch) declared bankruptcy. In its bankruptcy settlement, it was permitted to ditch a bunch of its pension and mine-cleanup obligations and spin off its best remaining assets into a new company called Contura Energy. Six Alpha executives promptly hopped over to Contura.
The settlement was premised on the idea that Alpha, emerging from bankruptcy, would be a viable company, with cash flow sufficient to cover its remaining obligations. Just one problem. Three months later, Alpha executives revealed that they had overlooked $100 million in outstanding debts and obligations in their filing. Whoops.
The West Virginia Department of Environmental Protection (DEP) is furious. In a short but potent written objection sent to the court on November 15, the DEP said it never would have made the deal it made with Alpha if the $100 million had been disclosed beforehand. It is reserving its right to deny Contura and its executives any new coal mining permits, anywhere. And it is suing the company for fraud.
(The executives in question say “the projections were never intended to be a guaranty,” the criticism is “irresponsible,” and both companies will still, despite what everyone else seems to expect for the coal industry, prosper.)
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http://www.vox.com/science-and-health/2016/11/28/13740684/coal-executives-overlooked-100-million