Blackjewel Settlement Unsealed; 600 Wyoming Employees Affected

About 600 employees suddenly laid off last year at two Campbell County coal mines formerly owned by Blackjewel, LLC, plus about 1,100 of the company's employees in central Appalachia may receive $17.3 million, according to a recently unsealed proposed settlement of a class action lawsuit.

'I think it's a very good settlement," said Ned Pillersdorf of Prestonsburg, Ky., who was among the attorneys for the employees in the lawsuit.

In bankruptcy court, people in class action lawsuits get railroaded, Pillersdorf said.

The settlement was tentatively reached in March, but was sealed until Sept. 1.

The employees, including those at the Belle Ayr and Eagle Butte mines, have been notified.

Pillersdorf said the settlement still needs to clear two more legal hurdles before the employees receive any money: A preliminary hearing in the U.S. Bankruptcy Court of the Southern District of West Virginia on Oct. 9. If the bankruptcy court judge approves that, a "fairness hearing" will be held probably in late November for individuals represented in the class action who may want to opt out of the settlement.

If the settlement clears those hurdles, Pillersdorf said employees probably will receive checks early next year.

According to the settlement, there are two main categories in this case apply under bankruptcy law: The first is "an allowed priority claim" equal to 60% of sixty days' pay and benefits for each member of the class and totaling $14.6 million. The second is "an allowed priority wage claim" totaling $2.7 million.

The unknown factor is how much money is in the Blackjewel estate, Pillersdorf said.

The attorneys who took over the representation of Blackjewel, he said, have been trying to find whether former CEO Jeffrey Hoops Sr., may have siphoned from the company before it declared bankruptcy.

Hoops and his son have agreed to pay an additional $125,000 as part of the settlement.

The settlement does not mean any of the defendants are admitting any facts of the lawsuit, nor are they admitting any liability. "The Parties acknowledge and agree that they are entering into this Settlement Agreement to avoid further costs of litigation ...."

The proposed settlement marks the latest chapter in the saga that began July 1, 2019, when the Milton, W.Va.-based Blackjewel, LLC, and related companies filed for Chapter 11 business reorganization Bankruptcy Protection. That same day, they closed the two mines in Wyoming and about 30 mines and other operations in Kentucky, Virginia and West Virginia.

The employees were sent home.

A week later, Wyoming miner David Engelbrecht filed a class-action lawsuit against Blackjewel LLC, for the alleged illegal closing of its mines. He sued under the Worker Adjustment and Retraining Notification (WARN) Act for pay and benefits denied to him and others in the class of workers. The act requires certain employers provide 60 days advance written notice if they intend to close a plant or conduct a mass layoff.

The layoffs roiled an already troubled coal mining industry in Campbell County.

The subsequent complicated bankruptcy case, which has 2,351 docket entries as of Friday, was made even more complicated as other businesses such as Wyoming Machinery in Mills had their own disputes with Blackjewel.

Contura Energy, which sold the Wyoming mines to Blackjewel in 2017 but still holds the mining permits, announced its sale of the mines Eagle Specialty Materials, LLC, a subsidiary of Alabama-based FM Coal.

In October, the U.S. Department of Labor ordered Blackjewel to pay about 500 employees at Belle Ayr and Eagle Butte nearly $800,000 in back wages for the last week of June 2019.