Massey Inks $265 Million Deal to End Investor Class Action
The plaintiff firms Labaton Sucharow and Robbins Geller Rudman & Dowd have secured a $265 million cash settlement in a securities fraud case relating to a 2010 explosion at a coal mine owned by Massey Energy Company.
The settlement, which requires approval from U.S. District Judge Irene Berger in Beckley, W.Va., would be distributed among a class of thousands of purchasers of Massey common stock, according to a press release issued by Labaton and Robbins Geller. Lead plaintiff Commonwealth of Massachusetts Pension Reserves Investment Board alleged that Massey and its officials hid safety violations and misled shareholders between February 2008 and May 2010 by touting its safety record. In April 2010, an explosion at Massey's Upper Big Branch in West Virginia killed 29 miners.
Labaton and Robbins Geller have yet to formally seek judicial approval or propose an attorney fee award. Cleary Gottlieb Steen & Hamilton represents Alpha Natural Resources Inc., which acquired Massey in 2011.
"We are very pleased to achieve this settlement on behalf of investors," Labaton partner Joel Bernstein said in a statement.
Massey became a litigation magnet in the wake of the Upper Big Branch explosion. In June 2011, Grant & Eisenhofer unsuccessfully moved to block Alpha's acquisition of Massey, arguing that Massey's board failed to negotiate enough money to resolve potential shareholder derivative claims relating to the explosion. In December 2011, Cleary guided Alpha to a $209 million nonprosecution agreement with federal prosecutors.
Cleary's Mitchell Lowenthal, who represented Alpha, was not immediately available for comment.
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