Wednesday, December 7, 2011
Back in the summer, there was a 'to-do' about the Massey shareholder litigation. You'll remember that shareholders brought a derivative suit against the directors for violations of their fiduciary duties in the running of the company that ended with a disaster at the Upper Big Branch mine in West Virginia. Twenty-nine miners lost their lives. Chancellor Strine dismissed the case after Massey was acquired by Alpha, refusing to allow the shareholders who had lost standing to maintain the case. Although the shareholders' attorney were volubly upset at the decision, Strine made it clear first, that there were still other avenues to find justice for the victims, and second, the shareholders weren't the victims. They had benefited from the directors' bad acts.
Now, we get word that the Federal Mine Safety and Health Administration and the US attorney have reached settlements with Alpha, Massey's successor. Alpha will pay $209 million in civil and criminal penalities to resolve its liability with respect to the UBB disaster. This settlement includes $46.5 million in payments to the families of the victims of the UBB disaster. While this settlement resolved any corporate criminal liability, it left open the possibility of personal criminal liability for executives of Massey.
This seems like a start.