Xcoal alleges companies owned by Justice family failed to honor coal supply agreement

By Kyla Asbury | Aug 3, 2018

WILMINGTON, Del. – Pennsylvania company Xcoal Energy & Resources is suing two companies owned by Gov. Jim Justice's family for allegedly breaching their contract with the plaintiff.

Bluestone Energy Sales Corp., Southern Coal Corp. and Justice were named as defendants in the complaint, which was heavily redacted.

Xcoal claims it and Bluestone had a coal supply agreement that was entered into in October, according to the complaint filed in the U.S. District Court for the District of Delaware.

Southern Coal and Justice also executed a performance guarantee agreement, according to the suit.

Xcoal claims the defendants breached their obligations under the 2017 coal supply agreement and the performance guarantee agreement because they allegedly failed to timely supply the proper quantity and quality of coal required under the agreements.

Bluestone was supposed to supply Xcoal with 30,000 net tons of metallurgical coal every month for two years, which would total 720,000 tons.

However, Xcoal alleges it only received a total of 24,000 tons of metallurgical coal during an approximate six-month time frame. The coal allegedly was also not up to par with the quality set forth in the agreement.

Xcoal claims the defendants owe approximately $6.9 million in damages for the allegedly undelivered coal.

Xcoal is seeking damages and declaration that the defendants breached the agreement and the guarantee signed by Southern Coal and Justice. Xcoal is represented by Geoffrey G. Grivner, Kevin P. Lucas and Daniel C. Garfinkel of Buchanan Ingersoll & Rooney in Wilmington, Delaware.

In their answer to the complaint and counter-claim, the defendants deny the allegations against them.

The defendants allege that Xcoal placed “unreasonable commercial demands" for the coal shipments that was beyond what was agreed upon in the coal supply agreement.

Previously, the defendants allege, a civil action was filed against Xcoal by Southern in 2012 after it alleged Xcoal was supposed to by substantial sums of coal and did not make any coal orders.

The defendants claim Xcoal also breached its contract.

The defendants are represented by Mark Robeck and Mindy Pava of Kelley Drye & Warren in Washington, D.C.; and John A. Sensing and Jennifer Penberthy Buckley of Potter Anderson & Corroon in Wilmington, Delaware.

U.S. District Court for the District of Delaware case number 1:18-cv-00819

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U.S. District Court for the District of Delaware Xcoal Energy and Resources

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