CHARLESTON, W.Va. -- Courts in West Virginia and Delaware on Tuesday paved the way for Alpha Natural Resources to acquire troubled and controversial Massey Energy today, but not before newly unsealed documents raised more questions about the events leading up to the $8.5 billion deal.
In West Virginia, the state Supreme Court declined a request by Massey shareholder groups for a preliminary injunction to block the buyout. A judge in Delaware's business court, ruling in a similar case filed there, also did not halt the merger.
At the same time, the West Virginia court made public new legal filings that outlined an alleged "secret pact" that promised jobs for high-level Massey officials with controversial roles in the disaster that killed 29 workers at Massey's Upper Big Branch Mine.
The filings, from lawyers for Massey shareholder groups, allege Alpha CEO Kevin Crutchfield secretly pledged jobs for two Massey officials who were in charge of the Upper Big Branch Mine and two corporate executives who have been running the company's internal investigation of the disaster.
Shareholders for the two coal giants are expected to approve the merger this morning during separate meetings at the same Tennessee hotel. West Virginia Senate President Earl Ray Tomblin, acting as governor, is scheduled to appear this afternoon with Alpha officials for a "sign unveiling ceremony" at Massey's regional headquarters in Boone County.
"Following the acquisition, Alpha will hold the second largest coal reserve in America, with approximately five billion tons of reserves and will become one of the top suppliers of metallurgical coal in the world," a media advisory about the ceremony said.
"Alpha will operate approximately 150 coal mines and 40 preparation plants, more than any other coal company in America," the advisory said. "Once the acquisition is complete, Alpha and its affiliates will employ 14,000 people, including approximately 7,000 in W.Va., making it one of the largest private-sector employers in the state."
Richmond, Va.-based Massey had already been widely criticized for its workplace safety practices and major environmental violations. The merger, though, comes just a little more than a year after the April 5, 2010, explosion at Upper Big Branch. By at least one account, the worst U.S. coal-mining disaster since 1970 has cost the coal giant more than $1 billion.
Shareholder groups have added allegations about the merger to previous lawsuits against Massey board members and executives, alleging "systematic failures in oversight and willful violations of applicable law" led to the mine disaster. The lawsuits now allege that Massey management moved more quickly toward the Alpha deal in an effort to shed any personal liability they might have in the deaths of the 29 miners and the company's subsequent financial losses.
Documents previously unsealed in the Delaware case have revealed serious concerns by Alpha officials about Massey's safety practices and corporate culture, questions about the merger, and warnings issued directly to Massey's board about safety problems at Upper Big Branch prior to the disaster.
In the West Virginia case, the Supreme Court said Tuesday it did not have jurisdiction to consider an injunction request to block the merger and sent the matter back to Kanawha Circuit Judge Charles King.
Justices did unseal copies of the Massey shareholders' petition for an injunction and the company's response.