Mine royalties dispute ends up in court

SUMMERSVILLE -- An eastern Kentucky corporation has failed to pay royalties to a local mining company.

Viking Mining LLC and David Bundy filed a lawsuit filed July 21 in Nicholas Circuit Court against  Viking Acquisition Group LLC.

According to the complaint, the parties entered into an asset purchase agreement June 30, 2010, which said Viking Acquisition would purchase assets from Viking Mining for $1,600,000, as well as an overriding royalty of $1 per clean ton mined and sold from the leased property.

At closing on July 15, 2010, Viking Acquisition paid $1,600,000 to the plaintiffs. When the closing documents were prepared, the language regarding the royalty of $1 per clean ton of coal mined and sold during the term of the agreement – until $1,000,000 in royalties have been paid or all mineable and merchantable coal has been removed from the property – was omitted from the document.

The lawsuit says between January 2011 and May 2011, the defendants paid the royalty as per the agreement. It was in 2012 that problems occurred. According to the lawsuit, as of March 31, 2012, the defendant had mined and sold 124,582.19 clean tons of coal and the plaintiffs have only been paid $31,684.97; leaving a remainder of $92,897.22 in royalties as of  April 25, 2012.

The plaintiffs say they were told that the defendants ceased mining coal from the property on March 31, 2012. Bundy says Viking Acquisition may have entered into an option to sell the property or has sold the property to a third party.

The plaintiffs seek a judgment for $92,867.22, plus any additional royalties due, as well as pre- and post-judgment interest and costs, plus $30,965.74, with pre- and post-judgment interest.

The plaintiffs are represented by attorney Gregory W. Sproules of Gregory W. Sproules PLLC in Summersville. The case has been assigned to Circuit Judge Gary L. Johnson

Nicholas Circuit Court case number 14-C-87