Massachusetts Pension Reserves Investment Management Board, Boston, and others agreed to a $265 million cash settlement in a class-action lawsuit against the former Massey Energy Co., which is now doing business as Alpha Appalachia Holdings Inc., confirmed MassPRIM spokeswoman Nicole Giambusso.
The $53.9 billion pension fund board, which served as lead plaintiff in the case on behalf of itself and other investors that purchased Massey Energy stock, alleged in the suit that Massey Energy, one of the largest producers of coal in the U.S., misrepresented its safety practices and the financial losses suffered by investors when the market learned of those misrepresentations.
As alleged, Massey Energy and its officials misled investors by regularly affirming its safety improvement initiatives established after a deadly fire at one of its coal mines in 2006, and then in April 2010, when 29 miners died in an explosion at Massey's Upper Big Branch mine in West Virginia.
News of the explosion, subsequent criminal investigations and indictments, and congressional testimony revealed that despite Massey Energy's public statements of putting “safety first,” it had in fact disregarded industry safety standards and routinely concealed safety violations from federal safety inspectors.
Alpha Appalachia Holdings' parent company, Alpha Natural Resources, acquired Massey Energy in 2011.
“While we could have gone through a prolonged litigation process, we felt the prudent course of action was to settle with the claimant, which eliminates future legal costs and risk,” said Alpha Natural Resources spokesman Ted Pile in an e-mail.
