HUNTINGTON, W.Va. — Lawyers liquidating the Blackjewel coal company whose unpaid miners blocked rail traffic for months in Eastern Kentucky in 2019 to protest their treatment are claiming in court that the former CEO made special business deals to extract assets prior to halting paychecks and filing bankruptcy.
Jeff Hoops Sr. resigned as CEO days after the company filed Chapter 11 last July. The lawsuit filed in the U.S. Bankruptcy Court in the Southern District of West Virginia by lawyers who are liquidating the company claims Hoops signed deals with other companies he or his family controlled that extracted millions of dollars from Blackjewel in the years leading up to the bankruptcy.
Attorneys for bankrupt coal company Blackjewel LLC and its creditors are asking a federal judge to allow them to recover money from Hoops and his other businesses for what Blackjewel said were transactions that placed his financial interests above the company he founded and led until its failure.
The bankruptcy filing followed by the loss of a crucial creditor shut down operations at Blackjewel’s 32 coal mines in West Virginia, Kentucky, Virginia, and Wyoming.
Blackjewel had 1,100 employees at its Appalachian mines and about 600 at surface-mining operations in Wyoming
At the time of its bankruptcy filing, Blackjewel owed about $146 million in unpaid taxes and also owed workers unpaid wages and retirement funding.