CHARLESTON, W.Va., Nov. 21, 2014 /PRNewswire-USNewswire/ -- A federal bankruptcy court in Kentucky issued an important decision yesterday giving regulators a strong hand in enforcing environmental laws against bankrupt coal companies. As part of the decision, the court awarded the West Virginia Department of Environmental Protection (DEP) over $2.7 million to address reclamation of an abandoned coal mine in Fayette County, West Virginia.
Bailey & Glasser attorneys Kevin Barrett and Mike Hissam represented the DEP in pursuing claims from the bankruptcy estate of Appalachian Fuels LLC. The claims consisted of environmental penalties, as well as the costs of ongoing reclamation and water treatment at the abandoned site. The case went to trial in bankruptcy court in Louisville in June 2014. After a three-day trial, the bankruptcy court issued a lengthy opinion yesterday granting DEP's administrative expense application in full.
The bankruptcy court held that Appalachian Fuels had to perform the reclamation obligations of its subsidiary which held the permits, given that Appalachian Fuels had always performed the mining and reclamation obligations at the mine site. Second, the bankruptcy court held that DEP's claims were entitled to "administrative expense priority," despite the fact that DEP had not incurred any reclamation costs during the pendency of the bankruptcy case and would not incur significant reclamation costs until years later. In accordance with the decision, the court granted the DEP an administrative claim totaling more than $2.7 million, including up to $1.9 million in reclamation and water treatment costs and over $700,000 in penalties.
"With the rise of significant coal company bankruptcy cases in the past two years, and with others on the horizon in a tough coal market, the decision imposes broader corporate responsibility for environmental legacy liabilities. It also makes clear that the responsibility to remediate environmental issues doesn't end upon the commencement of a bankruptcy case and, indeed, may give rise to significant priority claims that a coal company must satisfy as a condition to reorganizing in chapter 11. The combination gives federal and state environmental regulators a stronger hand in coal company bankruptcy cases," said Kevin Barrett, a bankruptcy attorney at Bailey & Glasser's New York office.
Founded by Ben Bailey and Brian Glasser in 1999 in Charleston, West Virginia, Bailey & Glasser LLP has grown to include nearly 50 lawyers, with offices in seven states and D.C. The firm's complex litigation practice focuses on high-stakes commercial litigation; class actions for consumers, insureds, investors, and retirement plan participants; catastrophic injury and defective product cases; antitrust; and whistleblower lawsuits. The firm has extensive experience in energy law, and litigates energy cases in trial courts, bankruptcy courts, regulatory agencies, and appellate courts. It has a major corporate practice, and handles business matters ranging from assisting Chinese investors in acquiring US assets, to IPOs, to the negotiation and execution of billions of dollars in commercial transactions.
Contact: Kevin W. Barrett
SOURCE Bailey & Glasser LLP