BECKLEY – Plaintiffs attorneys say they have reached a $265 million cash settlement in the shareholder lawsuit against Massey Energy over the 2010 fatal explosion at the Upper Big Branch mine.
On Dec. 9, attorneys for the Commonwealth of Massachusetts Pension Reserves Investment Board announced the settlement, which they say will benefit thousands of class members and is subject to court approval.
Nothing has been posted on the case’s docket in U.S. District Court for the Southern District of West Virginia in Beckley. It is unclear how much plaintiffs attorneys will receive in the settlement.
“We are very pleased to achieve this settlement on behalf of investors,” said Joel Bernstein, of the firm Labaton Sucharow.
Labaton Sucharow and the firm Robbins Geller Rudman & Dowd served as lead counsel for the class. MA PRIM was the lead plaintiff.
Discovery in the case was stayed in July by U.S. District Judge Irene Berger while the two sides underwent mediation.
The fatal blast occurred in April 2010, killed 29 miners and was the result of Massey’s top executives ignoring dangerous conditions at their mines, says a complaint filed seven weeks after the incident. Massey subsidiary Performance Coal owned the mine, which is located in Raleigh County.
Alpha Natural Resources bought Massey in 2011 for $7.1 billion in cash and stock.
The day after the Upper Big Branch Mine exploded, Massey’s shares dropped 11 percent to $48.45.
As the month went on and more dangerous safety practices were alleged, Massey’s stock went to $36.63. Around that time, the first shareholder lawsuit was filed by the Commonwealth of Massachusetts Pension Reserves Investment Trust.
It claimed stockholders were misled by false statements about Massey’s safety records.
By May 17, 2010, the stock stood at a new low of $33.29.
However, the stock was up to $57 in January 2011 when Alpha decided to buy the company. It paid $69 per share in the acquisition.
James Humphreys & Associaates of Charleston was named liaison counsel for the class.
The United States also asked for a stay of discovery until Jan. 15 in order to protect the integrity of its criminal investigation of Massey.
“Individual defendants in this civil action may be, or may become, subjects or targets in the criminal investigation,” U.S. Attorney for the Southern District of West Virginia R. Booth Goodwin’s office argued.
“At present, these individual defendants have no access to the vast majority of the evidence material to the criminal investigation. They do not know, in other words, what information might be in the government’s possession.
“If civil discovery goes forward, that will change. The individual defendants will be able to use the civil discovery process to obtain much of the evidence that is at the heart of both this matter and the criminal investigation.
“With that evidence, they will be able to draw informed conclusions about key details of the government’s case – to learn what the government knows.
“That information could, in the worst case, allow the individual civil defendants to shape their own statements to the criminal investigation or to influence the testimony of other witnesses, thus obstructing the criminal investigation.”
From the West Virginia Record: Reach John O’Brien at firstname.lastname@example.org.