Massachusetts settles Alpha coal blast lawsuit for $265 million
BOSTON Dec 9 (Reuters) - Massachusetts on Monday announced a $265 million deal with Alpha Appalachia Holdings Inc to settle allegations that the coal miner artificially inflated its stock price by misrepresenting its safety record ahead of a deadly 2010 mine explosion.
The Massachusetts state pension fund was the lead plaintiff in the class action lawsuit against the former Massey Energy Co, which has been doing business as Alpha Appalachia since being acquired by Alpha Natural Resources Inc in 2011.
"This settlement returns significant taxpayer money to the state pension system that was lost as a result of misleading information," said Massachusetts Attorney General Martha Coakley in a press release.
The lawsuit claimed that Massey Energy had hidden a decades-long culture of safety violations that was only uncovered by the investigation into an explosion at its Upper Big Branch mine in West Virginia that killed 29 people.
The company's stock price plunged after the incident.
Massey Energy was the fourth-largest coal producer in the United States before it was acquired by Alpha Natural Resources for $7.1 billion in 2011. Alpha Natural Resources paid $209 million later that year to settle U.S. criminal charges related to the Upper Big Branch explosion.
"I am pleased with the outcome of this case. It is a significant win for the class and for PRIM," said Michael Trotsky, director of the Pension Reserves Management Board, which oversees the Massachusetts state pension fund.
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