(Adds details of the settlement and comment)
By Tracy Rucinski
Nov 29 Coal mining companies Alpha Natural
Resources Holdings Inc and Contura Energy Inc have
settled a lawsuit filed by a West Virginia regulator that
accused them of engaging in a $100 million fraud, according to
a court filing on Tuesday.
The West Virginia Department of Environmental Protection
(DEP) had accused executives of Contura, which bought Alpha's
best mines in its bankruptcy, of failing to account for $100
million in liabilities that were discovered after Alpha emerged
The regulator filed a lawsuit on Nov. 17 and said it was
concerned that the undisclosed liabilities threatened Alpha's
viability and thus hundreds of millions of dollars of mine
cleanups in the state of West Virginia.
In exchange for West Virginia dropping its lawsuit, Contura
will provide the regulator a $4 million letter of credit and up
to $4.5 million guaranty on Alpha's cleanup obligations.
In addition, Alpha will grant the regulator a mortgage in
property that was last appraised at $6.3 million a year ago as
part of the settlement, which is subject to approval by the U.S.
Bankruptcy Court in Richmond, Virginia.
DEP cabinet secretary Randy Huffman said in a statement the
agreement provides the state with added assurance Alpha will
carry out its mine cleanup work. "It also helps to ensure that
Alpha will remain a viable operating company with sufficient
resources to perform required land reclamation and water
treatment," Huffman said.
Three of Contura's top executives, including Chief Executive
Officer Kevin Crutchfield, were scheduled to give depositions on
Dec. 2 and Dec. 3 as part of the West Virginia lawsuit.
The executives had been with Alpha until it emerged from
bankruptcy in July.
In separate statements, Alpha and Contura said they were
pleased with the resolution.
"We have always been of the view that Contura's officers had
acted in good faith in all respects, including in connection
with the Alpha plan process, and we welcome this positive
resolution," Neale Trangucci, independent director of Contura,
said in an emailed statement.
Alpha Chief Executive David Stetson said that approval of
the settlement, along with a 2017 mining plan that takes
advantage of a stronger coal market and maintains a focus on
cost savings, "will keep Alpha sustainable in the long run."
Alpha filed for bankruptcy in August 2015 and emerged a year
later, after selling its best mines to its lenders who formed
(Reporting by Tracy Rucinski; Editing by Tom Hals and Tom