May 23, 2016 Read More →

West Virginia Regulators Question Alpha’s Apparent Intent to Abandon Mine-Reclamation Liabilities

Daniel Tyson for the Beckley (W. Va.) Register-Herald:

West Virginia filed an objection earlier this week to the proposed sale of Alpha Natural Resources’ assets to a hedge fund, stating the sale could leave the state holding hundreds of millions in reclamation liabilities.

The state argues that if the sale is approved, it could tilt the process in favor of the hedge fund and institutional investors, leaving West Virginia to accept costly concessions.

“DEP’s own estimates of Alpha’s reclamation and water treatment obligation in the State of West Virginia runs to roughly $1 billion on an undiscounted basis,” the objection reads.

The state contends the court should closely consider any business justification Alpha management gave as to the sale.

In concluding, West Virginia argued approval of the sale would “appear to contravene Alpha’s fiduciary responsibilities to all of its creditors and parties in interest, not just the most vocal and powerful” in determining whether and how to propose a sale of assets.

Earlier this month, the labor agreements covering about 600 active miners and 2,600 retired union miners were dropped by a judge’s order. In March, Alpha filed court papers that the company spent about $53 million in 2015 on health care benefits for employees under the labor contract, which is more than 30 percent higher than on non-union employees.

The company successfully argued dropping retiree benefits as a way to eliminate about $60 million to offset the financially strapped company.

Full article: State objects to Alpha Sale

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