Investors who sued Massey Energy accept mediation
MORGANTOWN, W.Va. (AP) — Shareholders who say the former Massey Energy Co. lied about its safety record to inflate stock prices before the Upper Big Branch mine disaster have narrowed their settlement demands enough to enter mediation with the company.
U.S. District Judge Irene Berger signed an order last week that puts the long-running civil lawsuit on hold for six months to let those negotiations proceed with outside help.
In court filings, both parties say they've been working to settle the case since December 2011 with face-to-face meetings and written communications including "a series of demands and counter-offers that have narrowed the extent of the disagreement."
The joint motion says the talks have reached a point where mediation would help.
Investors led by the Massachusetts Pension Reserves Investment say Massey repeatedly lied about its record, artificially inflating stock prices between 2008 and 2010. They say shareholders had no knowledge of the long history of violations until after the southern West Virginia mine exploded in April 2010, killing 29 men.
Massey was later bought by Virginia-based Alpha Natural Resources.
The shareholders' case has been on hold because the judge is shielding evidence the plaintiffs want to use from an ongoing criminal investigation.
Four investigations found the blast was sparked by worn and broken equipment, fueled by accumulations of methane gas and coal dust, and allowed to spread because of clogged and broken water sprayers.
Investigators also found "systematic, intentional and aggressive efforts" to hide problems and throw off inspectors, including the falsification of safety records.
Former superintendent Gary May and security chief Hughie Elbert Stover are behind bars for their actions at the mine.
A former president of another Massey subsidiary, meanwhile, is awaiting sentencing for conspiracy. David Hughart is cooperating with prosecutors and is set to appear Aug. 1 in Beckley.