West Virginia Settles Fraud Suit Over Alpha Bankruptcy Plan
West Virginia has settled a suit with Alpha Natural Resources over inaccurate revenue projections included in the coal company’s bankruptcy plan. In early November the state accused Alpha’s former top executives of fraud after it came to light that the company had $100 million dollars in undisclosed liabilities on its balance sheet. Those executives now work for Contura, which owns Alpha’s former mines in Wyoming.
In the suit, West Virginia said those liabilities made it more likely the company would fail again, which could leave the state on the hook for cleaning up its mines.
In exchange for dropping the suit and releasing the executives from liability, Alpha and Contura have agreed to put $15 million in additional cleanup guarantees.
“This additional security protects West Virginia in the event that Alpha should enter bankruptcy or fail again over the next two years,” said Kevin Barrett, a special assistant attorney general for West Virginia. The agreement still needs approval from the bankruptcy court.