Alpha Natural execs. face fraud charges for failing to disclose $100M in liabilities
West Virginia has accused Alpha Natural Resources executives of potential fraud for not reporting $100 million in liabilities during bankruptcy proceedings.
West Virginia regulators argued that had the $100 million cash burden been known, it might have thwarted Alpha Natural Resources’ restructuring agreement approval.
The state’s Department of Environmental Protection said the coal miner, which filed for bankruptcy in August 2015, was allowed to dump some of its pension and mine-clean-up obligations, as well as to spin off its best remaining assets into a new company, called Contura Energy, based on the premise that Alpha would emerge from bankruptcy as a viable firm.
West Virgina’s DEP based such decision on evidence presented by the company that it had sufficient cash flow at the time to cover its remaining obligations. But only three months later, some of Alpha executives revealed that they had overlooked $100 million in outstanding debts and obligations in their filing, The Star Tribune reports.
The DEP claims the undisclosed liabilities "materially increase the probability that DEP will be left with claims under the surface-mining and other environmental laws against the individuals and entities in ownership and control positions with respect to the debtors' mining operations."
The company refutes such allegations, arguing that while the $100 million was not included in cash flow statements provided to the court, it was listed in other documents.