SCOTT DEPOT — The nonprofit land conservation fund Virginia Conservation Legacy Fund recently purchased a group of bankrupt coalmines from Patriot Coal Corporation.
The acquisition was managed by a team of Pillsbury lawyers, and although the deal between VCLF and Patriot has closed, according to the Pillsbury Winthrop Shaw Pittman lawyers, the work is far from over.
“The deal is closed, the permits are transferred, and our client has assumed the liabilities,” Andrew Troop, one of the Pillsbury partners leading the acquisition, told The West Virginia Record. “Now, the real work begins.”
According to Troop, VCLF must now work with the state of West Virginia to reclaim mining permits, and get money from sureties to cover costs associated with the deal.
“[VCLF’s] hope is that it will be able to clean up all of the properties for less than the amount of the outstanding surety bond," Troop said. "The sureties are excited about that possibility because it minimizes their exposure, and I think that the state is happy to see an third-party committed to the environment and taking on the cleanup responsibility,”
The conservation fund routinely acquires land to preserve and restore the environment, and to sequester carbon. However, it is very unusual for an environmental interest group to purchase a coal mine. The land acquisition turned out to be the largest mine reclamation project ever undertaken in the state of West Virginia.
In August, VCLF acquired all of the bankrupt Patriot's assets and liabilities that were not included in its previously announced sale agreement with Blackhawk Mining LLC. Among these, VCLF took control of two of Patriot’s mining complexes, and the permits associated with each. VCLF also assumed responsibility for the environmental and health liabilities that Patriot held.
“The deal was different from a normal bankruptcy transaction, because the issues were taken on by a non-traditional acquirer,” Troop said.
Tom Clark, CEO of VCLF, acquired Patriot in the hopes of establishing a coalmining system with environmentally friendly practices and regulations.
“[He] has a multi-dimensional vision to support the public interest,” said Sheila Harvey, one of Partner attorneys leading the acquisition. “He has the goal of massive reforestation in the coalmining areas of the East Coast, in part to restore the environment, and also to create carbon credits to be sold along with the coal that will be mined.”
Not only did Clark acquire Patriot in order to benefit the environment, he also kept the mineworkers interests in mind, said Harvey.
“He is providing financial benefit to the workers themselves who have an ongoing interest in the operation, and taking on black lung obligations,” said Harvey. “Frankly, he is providing employment for the coal miners who are still looking at coal as their livelihood.”
Troop pointed out that VCLF’s acquisition left 500 employees with jobs that, through the Blackhawk acquisition alone, would otherwise not have had.
“And the Black Hawk deal alone would have taken much longer without the VCLF assuming liability, and it would have been much more difficult for Black Hawk to achieve,” said Harvey.
According to Troop, the deal would never have been accomplished without the help of VCLF.
“VCLF was the linchpin for getting this transaction done,” said Troop.