A group of investors Massey Energy Co. has asked the West Virginia Supreme Court of Appeals for the company at 7.1 billion U.S. dollars to buy Alpha Natural Resources Inc. unit, just before the expected approval of the shareholders of the deal Wednesday. The court is expected to meet Tuesday to decide whether an interim order sought by the investors, who claim that Massey to the board of directors approved the sale to personal liability for a coal mining accident last year that 29 miners slain and ran to escape grant the company share price.
The suit, originally filed in Kanawha County Circuit Court, claims Massey Alpha gave preferential treatment in bidding and no important information about the negotiating process in its filings with the Securities and Exchange Commission to disclose, according to a lawyer for the plaintiffs, including California State Teachers’ Retirement System.
A separate lawsuit filed by the New Jersey Building Workers Pension Fund, also wants a ban on the sale, saying that the accident resulted in a loss of $ 1 billion in shareholder value. A Delaware Court of Chancery judge heard arguments Thursday in that case, but did not comment on the request for an injunction.
Representatives from Alpha and Massey declined to comment on the lawsuits.
Depots in the West Virginia case shall be subject to a motion to seal, and are not disclosed. In the Delaware Case, Massey and Alpha argued against the injunction, saying, Alpha was the highest bidder at a legitimate auction process that lasted several months. Lawyers from both companies said prosecutors could still bring their claims after the merger.
Lawyers for Massey also said the directors of the company “a proactive role in monitoring and ensuring that management responded well to the safety of workers and compliance issues as they arose took.”
Both lawsuits were originally filed last year, saying the alleged failure of the board of directors Massey to improve safety at the company contributed to the dramatic increase in its upper major branch in Mont Coal mine, W.Va., on April 5 2010, the worst coal mining disaster in the U.S. in 40 years.
The West Virginia suit alleges that the board has not complied with a court in 2008 to institute new security systems at the company. The order came from a 2007 Massey filed after two miners were slain in 2006 in an accident. The suit contends that the board not to execute zijn fiduciary obligations to shareholders, including those related to sales.
“Right now, shareholders have incomplete information in order to vote their shares. As stated in our complaint, the information they do not directly speak to the integrity of the sales process,” said Badge Humphries, a Charleston, SC, lawyer who is lead counsel for the Massey investors in the West Virginia case.
Mr. Humphries said there was a question about whether Massey shareholders will lose their position to sue after the company sold to Alpha, possibly clearing the Massey board of any liability of the lawsuits. He said he thinks the case should go forward after a sale, but the deal still has to be postponed until facts discovered in the case are made public.
The deal to Richmond, Virginia-based Massey and Alpha, based in Abingdon, Virginia, combine would be the largest U.S. supplier of metallurgical coal, the type used by steelmakers to make, and would end the 95-year-old Mark Massey faces more than a dozen wrongful death lawsuits from families of slain miners in the 2010 accident.
Massey has said it believes the accident was caused by a sudden flood of natural gas, a natural occurrence beyond the control of the company.
source:onlinewsj
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