CHARLESTON, W.Va. -- A group of Massey Energy shareholders urged a Delaware judge on Thursday to block the proposed $8.5 million buyout of Massey by Alpha Natural Resources.Vice Chancellor Leo Strine Jr., a judge in Delaware's business court, heard more than three hours of arguments on the matter, but indicated he would not rule until after the Memorial Day holiday.Alpha and Massey have scheduled separate shareholder meetings for Wednesday to seek final approval of the transaction.Groups of institutional shareholders such as union pension fund managers are seeking to at least temporarily block the merger. They argue that certain Massey management and board members rushed into the merger, agreeing to a deal for less than Massey is worth in an effort to shed any personal liability for the Upper Big Branch Mine Disaster.Stuart Grant, a lawyer for plaintiffs in the Delaware case, told Strine that the shareholder suits are the only way that Massey executives like retired CEO Don Blankenship "will be held accountable" for the mine disaster and the resulting financial losses to Massey."No one is going to do anything unless you let us go forward," Grant said. "Corporate boards that allow wrongdoing walk. That's what's going to happen."Lawyers for the Massey management argue that board members and executives did nothing wrong, denying allegations that they willingly allowed unsafe practices at the company to continue. And lawyers for Alpha argue that any claims against Massey executives and board members would survive the merger, so there's no need for an injunction blocking the deal.
During Thursday's hearing, which was broadcast on the Internet by the Courtroom Video Network, Strine said that Massey stockholders were actually "the least sympathetic characters" in the entire case."Any investor who invested in Massey...knew the managerial culture it was buying into, and knew that you had people who believed that their way of doing it was better than the people charged with enforcing the law," Strine said.Earlier this week, Strine had forced the parties in the case to file public versions of their legal briefs, revealing previously confidential testimony by various Massey and Alpha officials and a variety of internal documents about the merger.The latest revelation from those documents was that Massey board members were warned in February 2010 by safety auditor Joe Pavlovich -- a former federal inspector who previously worked on independent reviews with longtime safety advocate Davitt McAteer -- about problems cleaning up explosive coal dust at Upper Big Branch.Those documents indicated that Massey executives thought a plan was in place to deal with the problem. But state and federal investigators have said accumulations of coal dust fueled the April 5, 2010, explosion.In West Virginia, the state Supreme Court has been asked to grant an emergency injunction to block the Alpha-Massey transaction.Court officials are so far refusing to release records about the case, including a wealth of other sworn statements and internal documents about the transaction. Justices have scheduled a closed-door conference for Tuesday to consider the case and whether records about it should be made public.Reach Ken Ward Jr. at email@example.com or 304-348-1702.