Coal company owned by governor sued for not paying settlement

By Chris Dickerson | Mar 30, 2018

HUNTINGTON – A coal company owned by Gov. Jim Justice has been sued for not paying a nearly $1 million settlement from another lawsuit.

Kentucky Fuel Corp., the company owned by Justice, was sued by Peoples Bank of Ohio in U.S. Bankruptcy Court on March 28. The bank took on the credit of Producers Coal Inc. and Moussie Processing in the bankruptcy proceedings of Dennis Ray Johnson II, the former owner of several coal companies.

Producers Coal and Moussie had sued Kentucky Fuel in 2014 in Knott County Circuit Court in Kentucky claiming it failed to meet the terms of a coal transaction. They settled in 2015 for $2 million, and Kentucky Fuel paid $1 million up front. The rest was to be paid in 20 monthly installments of $50,000. The bank claims Kentucky Fuel only made the first $50,000 payment.

“As of the date of this Complaint, Kentucky Fuel still owes a balance under the letter Agreement of $950,000,” the complaint states.

Johnson filed Chapter 11 bankruptcy in 2016. So did the 13 coal-related businesses he owned, including Producers Coal and Moussie. All of those businesses’ bankruptcies were consolidated with Johnson’s case.

Moussie Processing also says it leased a coal processing plant to Kentucky Fuel and was to be paid with a flat fee and a percentage of sales from the coal. But Moussie claims Kentucky Fuel didn’t pay for loaded and processed coal. It seeks nearly $170,000 for those actions.

Also, Moussie claims its employees received threatening and frivolous communications from Kentucky Fuel employees.

“On numerous occasions subsequent to the execution of the lease, defendant has interfered with the operations of plaintiff by making groundless allegations of default, communicating in a harassing and threatening manner with key employees of plaintiff and other individuals and other outrageous conduct,” the complaint states.

U.S. Bankruptcy Court for the Southern District of West Virginia case number 3:18-ap-3004

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