Massey: W.Va. mine families offered $3M deals

AP News
Posted: May 04, 2011 6:56 PM

CHARLESTON, W.Va. (AP) _ Massey Energy Co. has offered families of the 29 miners killed in the Upper Big Branch coal mine explosion $3 million apiece to settle their claims, according to a document filed with the U.S. Securities and Exchange Commission.

The detail included in the filing is Massey's first confirmation of the size of its settlement offers. The Virginia-based company hadn't detailed the offers publicly, though family members had set the offers at $3 million.

The document is a proxy statement jointly filed in conjunction with rival coal producer Alpha Natural Resources' proposed $7.1 billion takeover of Massey. The deal is due to close after shareholders of both companies vote June 1.

"Five families have filed wrongful death suits," the companies said in the document. "Massey has also made a settlement offer of $3 million to each deceased miner's family."

The April 5, 2010 Upper Big Branch explosion was the deadliest in the U.S. coalfields since 1970 and remains the target of civil and criminal investigations.

The filing also references the retirement last year of Massey Chief Executive Don Blankenship. He accepted a $12 million retirement package as the company was weighing a growing number of buyout offers last winter.

It also details Alpha's pursuit of Massey in competition _ and at times in conjunction _ with other unnamed coal companies. The proxy was filed Friday with the SEC.

The document shows the companies first talked about a deal in 2006. Alpha decided to try again immediately after the explosion, when Chairman Mike Quillen was dispatched to meet with Blankenship on April 26, 2010.

"Mr. Blankenship informed Mr. Quillen that it was Mr. Blankenship's view that a potential business combination with Alpha was not in the best interests of Massey's stockholders at the time," the companies said.

Talks resumed in August and several unnamed companies got involved. But by January, Blankenship had departed and Massey was weighing offers from Alpha and another company.

It chose Alpha.

"There was less certainty in Company C's ability to close the transaction, operate the combined entity effectively, realize synergies and achieve their respective financial projections of cost savings," the companies said, referring to a losing bidder.

Blankenship retired abruptly Dec. 3, but the companies now say he'd been contemplating leaving for months and discussed the idea informally with board members last summer and fall.

The board had begun thinking about his departure too and assessed whether he was the company's best option.

"In connection with these discussions, Mr. Blankenship elected to submit his resignation," the companies said.

The same day Massey announced Blankenship's retirement, the document shows, officials called Alpha and continued negotiating.