UBB families challenge Massey-Alpha deal
CHARLESTON, W.Va. -- The families of seven miners who died in the Upper Big Branch Mine Disaster have filed a new lawsuit against Massey Energy, challenging Massey's proposed deal to be taken over by Alpha Natural Resources.
The suit alleges that Massey insiders "will receive tremendous financial benefit" from the $8.5 billion deal, while victims of the disaster "will be subject to great risk and uncertainty."
"The plaintiff creditors are the representatives of many of the 29 fathers, husbands, sons and brothers who were killed on April 5, 2010, at the Upper Big Branch Mine, as a direct result of [Massey Energy's] corporate culture that placed a higher value on the production of coal than the safety of lives and its miners," the suit said.
"In light of defendants' knowledge of the unsafe working conditions at the Upper Big Branch Mine, their continued operation of the Upper Big Branch Mine despite this knowledge, the information contained in mine inspection records and the findings of investigative authorities, plaintiffs estimate the value of all claims stemming from the Upper Big Branch Mine explosion to meet or exceed the amount of $500 million."
Massey has put its estimated losses from any suits or settlements with the disaster's victims at $78 million, or $3 million per victim -- the amount that Massey has offered families of the miners who died.
"The amount of $78 million is grossly inadequate and does not accurately reflect the true value of the pending and potential cases," the new lawsuit alleges.
The suit was filed in Boone County Circuit Court on behalf of the families of miners Boone Payne, Adam Morgan, Joe Marcum, Carl Acord, Jason Atkins, Dillard Persinger and Deward Scott, all of whom died in the explosion. Also named as plaintiffs were explosion survivor Stanley Stewart and his wife, Mindi Stewart.
Named as defendants were Massey Energy, Massey Coal Services, Performance Coal Co., former Massey CEO Don Blankenship, current Massey CEO Baxter Phillips, and several other Massey officials.
Attached to the suit as exhibits are copies of the report of independent investigator Davitt McAteer and a report by a financial analyst who concluded that Massey insiders including Blankenship will have received "payouts and committed benefits with an aggregated value of $196 million" between 2010 and the time of the anticipated Alpha-Massey merger.
"[Massey] is a corporation with considerable assets, including some of the best coal reserves in the central Appalachian region," the suit says.
"As a result of the misconduct and mismanagement of the insider defendants... all assets of [Massey] are being transferred to Alpha in the merger," it says. "In doing so, the insider defendants, as well as other members of management, including former CEO Don Blankenship, are liquidating risk into cash and are able to walk away from the merger with substantial amounts of cash while the plaintiff creditors will have nothing more than unsecured claims against a highly leveraged, cash-poor company."
The suit says the legal action is being filed seeking "to establish a common benefit for the estates of all individuals who have claims" against Massey arising out of the mine disaster "so that their recoveries are protected to satisfy any judgments."
Officials from Massey and Alpha could not immediately be reached for comment.Reach Ken Ward Jr. at email@example.com or 304-348-1702.