Judge says former Massey board may be in contempt of court

CHARLESTON, W.Va. -- Former members of Massey Energy's board of directors will have to explain why they shouldn't be held in contempt of court for not taking steps to improve the company's safety performance prior to the Upper Big Branch Mine Disaster.A Kanawha County judge has issued an order that requires lawyers for those board members to make their case during a hearing scheduled for late October.The order, issued this week by Kanawha Circuit Judge James Stucky, allows certain Massey shareholder groups to continue their legal effort to hold top Massey executives and board members responsible for the mine disaster, and Massey's related financial losses.So far, though, Stucky has sealed from the public the petition that prompted his ruling and all of the related documents filed with that petition.Based on his review of those sealed documents, Stucky ruled that lawyers for the Manville Personal Injury Settlement Trust and other Massey shareholders appeared to have proven that the board members violated a June 2008 legal agreement aimed at improving Massey's safety performance.Stucky ruled that those documents indicated Massey board members did not implement required safety reporting, management and monitoring systems. The judge also said that the board did not create a new reporting system for compliance issues or conduct a review of training practices.
The judge also faulted board members for "failing to make a good faith effort to reform Massey Energy's corporate governance as intended by and required" the settlement agreement.Lawyers for the former Massey company, which is now part of Alpha Natural Resources, and for its former board, have not had a chance yet to respond to the shareholder groups' legal petition. The judge's ruling sets the stage for that response, by ordering the board members to "show cause" at an Oct. 24 hearing for why they should not be held in contempt.Shareholder group lawyers are seeking compensatory damages from the Massey board members, though because documents in the case are sealed, it's not clear exactly what they asked Stucky to award.The case before Stucky is one of several cases filed in West Virginia and Delaware in which former Massey shareholders are going after damages from Massey board members such as Don Blankenship and Bobby Inman.In one of those cases, before Kanawha Circuit Judge Charles King, records unsealed at the request of the Gazette and National Public Radio outlined various failures of the Massey board to take action on safety issues.Reach Ken Ward Jr. at kward@wvgazette.com or 304-348-1702.
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