Environmental Coalition Concerned By Alpha’s Failure to Disclose $100 Million During Bankruptcy #BeyondCoal

On November 28th, a coalition of environmental groups filed a “reservation of rights” in the bankruptcy of Alpha Natural Resources (now officially ANR) to highlight their concern that the company’s environmental cleanup obligations in coal-affected communities could be jeopardized after Alpha revealed that it had failed to disclose $100 million in payment obligations as part of its recent bankruptcy reorganization.

“It’s very troubling that Alpha failed to disclose such significant financial commitments, particularly when it was making promises and entering into agreements in order to emerge from bankruptcy,” said Mary Anne Hitt, director of Sierra Club’s Beyond Coal campaign. “We intend to hold Alpha to the terms of our existing settlement, and will continue to work to make sure that Alpha and other coal companies use their resources to clean up their mine sites.”

The coalition — which includes the Sierra Club, West Virginia Highlands Conservancy, and Ohio Valley Environmental Coalition — filed the “reservation of rights” after Alpha attempted to secure approval from the bankruptcy court for a post-bankruptcy settlement that would allow it to share some of the $100 million financial burden with Contura Energy, the newly formed company that now holds the most profitable “crown jewel” assets once held by Alpha. Under the terms of that proposed settlement, however, Alpha would remain responsible for approximately $50 million. Separately, in a formal complaint filed in the bankruptcy court, the West Virginia Department of Environmental Protection has accused Alpha, Contura, and a group of former Alpha executives who now lead Contura of fraud in failing to disclose the $100 million burden before Alpha’s reorganization plan was approved.

“The real victims here are the communities who live near Alpha’s coal mines in West Virginia and who must now face renewed uncertainty regarding the future prospects of the company given these new revelations,” said Cindy Rank of West Virginia Highlands Conservancy. “It would be devastating for those communities if Alpha defaults on its obligations and leaves its mine sites disturbed and continuing to pollute our waterways.”

“The news of the disclosure of these significant liabilities underscores the concerns raised by the coalition with Alpha’s use of worthless self-bonding in West Virginia,” said Dianne Bady with Ohio Valley Environmental Coalition. “It’s critical that the self-bonding loophole be closed so that we avoid a repeat of this unfortunate and deeply distressing situation.”

The groups are represented in the environmental settlement by attorneys with Appalachian Mountain Advocates, and in the bankruptcy proceeding by attorneys with Goldstein & McClintock and Earthjustice.