HUNTINGTON — A lawsuit has been filed against former Blackjewel CEO Jeff Hoops Sr. claiming he improperly used his position to benefit himself.
The lawsuit was filed earlier this month in U.S. Bankruptcy Court for the Southern District of West Virginia against Hoops, Lexington Coal Royalty Company, Triple H Real Estate and Construction & Reclamation Services.
"Hoops caused Plaintiffs to engage in numerous improper, unfair, and unreasonable transactions with Defendants," the complaint states. "These transactions were unauthorized self-dealing by Hoops because the transactions were intended to, and did, benefit Hoops, members of his family, and entities associated with them to the detriment of Plaintiffs and their creditors."
Hoops caused Revelation Energy to grant certain royalties to Triple H. Under the royalty deeds, Revelation agreed to pay Triple H an overriding royalty interest relating to coal mined from certain properties owned or leased by Revelation.
The complaint states that Hoops had a personal financial and familial interest in various transactions that weren't ever completely disclosed.
In 2016, Hoops created an arrangement in which he received payments from Blackjewel and MR Coal related to the sale of coal from Blackjewel to MR Coal. Hoops received numerous payments from Revelation and MR Coal related to the repayment of alleged advances in connection with coal sales to MR Coal.
"Hoops had a personal financial interest in the MR Coal Dealings," the complaint states. "The MR Coal Dealings were never approved by disinterested members of the board of Revelation or the other Plaintiffs. On information and belief, the MR Coal Dealings and Hoops’ personal interest therein were never fully or properly disclosed to the board of Revelation or any other Plaintiff."
Hoops received inappropriate payments to which he was not entitled, the complaint states.
"Revelation paid interest to Hoops on the basis of a six million dollar advance for periods when he advanced far less than that," the complaint states. "Additionally, Revelation paid interest to Hoops on the principal amounts of advances without reducing that amount based on prior payments. Hoops also far exceeded the limit on advanced amounts, for which he received excessive interest."
The complaint alleges breach of fiduciary duty, aiding and abetting breach of fiduciary duty and unjust enrichment.
The plaintiffs are seeking compensatory and punitive damages. They are represented by Joe M. Supple of Supple Law Office in Point Pleasant and Stephen D. Lerner, Scott A. Kane, F. Maximilian Czernin and Travis A. McRoberts and Nava Hazan of Squire Patton Boggs.
U.S. Bankruptcy Court for the Southern District of West Virginia case number: 3:20-ap-03015
