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In this March 28, 2017, file photo, a dump truck hauls coal at Eagle Butte Mine near Gillette, Wyo. Attorneys for bankrupt coal company Blackjewel LLC, which owned mines in Kentucky, Virginia, West Virginia and Wyoming, and its creditors are asking a federal judge to let them examine the finances of former CEO Jeff Hoops.

HUNTINGTON — Clearing a path through multiple motions and countermotions — and several courtroom hearings — the judge presiding over Blackjewel LLC’s Chapter 11 bankruptcy case ruled Tuesday that the debtors have the right to continue to seek discovery of documents from former Blackjewel CEO Jeff Hoops, his family and 19 other associates.

The decision handed down by U.S. Bankruptcy Judge Irene C. Berger, in the Southern District of West Virginia, allows Blackjewel debtors to continue receiving documents from United Bank, despite the objections of Hoops, the founder of Blackjewel, and the “Hoops Parties.”

Berger referred to an earlier ruling by U.S. District Judge Omar J. Aboulhosn, in U.S. District Court for the Southern District of West Virginia, who said his “patience has been tested by the Hoops Parties.”

The Hoopses had argued that the judge had no evidence of an intricate relationship among the 28 different individuals and entities and the debtors should not have access to documents from each.

The magistrate judge determined that “despite the Hoops Parties’ suggestion that they are comprised of distinct entities and individuals, there is insurmountable evidence that the Hoops Parties as a collective, along with the debtors and United Bank, have enjoyed and continue to enjoy an intricate business relationship that justifies the debtors’ discovery requests.”

In seeking the documents from United Bank, the debtors alleged the “Hoops Parties engaged in tens of millions of dollars of related party transactions with the Debtors that frequently are unexplained or not documented in ordinary manner” and they needed documents from United Bank to sort through those transactions.

United Bank had initially cooperated freely with Blackjewel in producing documents related to Hoops’ finances but then began not cooperating, prompting further court action compelling the bank to continue to cooperate in the discovery.

Court actions against Hoops and associates heated up last week when Blackjewel and affiliated debtor Revelation Energy sued Lexington Coal, owned by a trust affiliated with Hoops and members of his family.

The adversary proceeding, filed in the bankruptcy court, seeks to recover damages for alleged injuries that Blackjewel and Revelation said were caused by Lexington’s “improper actions in using and profiting from plaintiffs’ assets, including mining permits, inventory and equipment, without providing adequate consideration in return.”

Blackjewel and four affiliated debtors each filed for Chapter 11 status July 1, 2019, in the West Virginia court. Blackjewel at that time cut business ties with Hoops and certain family members.

Herald-Dispatch reporter Courtney Hessler contributed to this report.

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