The coal mogul who once controlled dozens of Blackjewel mines nationwide before being ousted by a bankruptcy judge could face an investigation into alleged fraud.
Nearly one year ago, two of the largest coal mines in the nation ground to a halt when the owner abruptly filed for bankruptcy and failed to secure interim funding. Hundreds of Wyoming workers were sent home indefinitely.
The Eagle Butte and Belle Ayr mines in the Powder River Basin have since come back online under new ownership. But the turbulent bankruptcy case involving coal firm Blackjewel continues and appears far from fully winding down. Several outstanding issues — from fraud allegations to a lingering dispute over shovels and unhappy creditors — have prevented the debtors from formally exiting Chapter 11 bankruptcy.
On Wednesday, the U.S. Bankruptcy Court for the Southern District of West Virginia held a status conference on the case, advancing some matters to evidentiary hearings and once more underscoring just how complicated a bankruptcy case can become.
According to recent court filings, parties involved in the case have yet to reach a “consensual plan of liquidation,” or agreed upon terms under which the bankrupt company can formally exit bankruptcy and distribute its assets to the creditors it owes money to.
The Star-Tribune continues to track the outstanding issues Blackjewel faces in bankruptcy court.
Back in January, debtors and other creditors involved in Blackjewel’s bankruptcy saga petitioned the court to investigate the company’s former CEO Jeffrey Hoops for allegedly stealing tens of millions of dollars for personal gain, a claim he has denied.
When Blackjewel filed for bankruptcy last July, the court ordered Hoops to step down before the restructuring process could continue.
Now, attorneys for the debtor Blackjewel have accused Hoops of a fraudulent money transfer during his time as CEO of the insolvent company. Counsel for the company contends Hoops illegally transferred $34 million to one of his other companies and family trusts, Clearwater Investment Holdings LLC, according to court documents filed June 11.
Clearwater Investment Holding continues to construct the Grand Patrician Resort in Milton, West Virginia as of March, according to reporting by the Herald-Dispatch.
The coal mogul who once controlled dozens of Blackjewel mines nationwide before being ousted by a bankruptcy judge could face an investigation into alleged fraud.
Hoops has denied the allegations, saying in January he had in fact loaned millions of dollars to Blackjewel from Clearwater. The case remains ongoing.
Another dispute left over from last summer’s unprecedented bankruptcy involves Komatsu Mining Corporation, an equipment company with multiple locations in Wyoming.
For months, the equipment company has demanded the Wyoming coal mines’ new owner, Eagle Specialty Materials, provide compensation for use of two of Komatsu’s gargantuan coal mining shovels built especially for the mining facilities.
When Blackjewel filed for bankruptcy, and later sold the Eagle Butte and Belle Ayr mines to Eagle Specialty Materials, the October sales agreement stipulated that Komatsu and the mines’ new owner would “work in good faith to attempt to reach a consensual agreement with respect to ESM’s acquisition of some or all of the Shovels.” In other words, the shovels weren’t included in the $40.2 million mine sale, but the companies would smooth out the details later.
But months have gone by and that agreement has yet to come to fruition due to an ongoing dispute over exactly how much money Eagle Specialty Materials owes to Komatsu for maintenance contracts related to the shovels.
Now, Komatsu wants its shovels back. But Eagle Specialty Materials has warned repeatedly in court documents the coal facilities would grind to a halt if the company lost the two industrial shovels.
What happened in the flurry of days following the shuttering of the Blackjewel mines warrants retelling, as developments from the unprecedented bankruptcy case continue to unfold and families across the country await answers.
On June 11, the court ruled it would lift the automatic stay on the shovels, allowing Komatsu the chance to reclaim the shovels or pursue the millions of dollars the company claims it’s owed from the former owner, Blackjewel, in bankruptcy court. At the court hearing Wednesday, the judge agreed to an evidentiary hearing.
When Blackjewel filed for bankruptcy last July 1, it did so with a pile of unmet land, water and safety fines at several of its over two dozen facilities. Blackjewel has continued to not comply with the Surface Mining Control and Reclamation Art or the Clean Water Act throughout the country, several conservation groups and environmental regulators allege in court documents.
After failing to secure sufficient interim funding to keep its coal facilities operational during bankruptcy proceedings, Blackjewel shuttered 32 mines across Wyoming, West Virginia, Virginia and Kentucky.
The company has since auctioned off several of its coal mines, but hundreds of mining permits remain in the insolvent company’s hands. The neglected permits — dotted throughout West Virginia, Virginia and Kentucky — carry steep liabilities.
In a motion filed in bankruptcy court this month, Kentucky environmental regulators contend Blackjewel has hundreds of outstanding environmental and mining violations at several mine sites in the state. The Commonwealth of Kentucky’s Energy and Environment Cabinet cited 13,125 violations of the Kentucky Pollutant Discharge Elimination System by Blackjewel. The cabinet sought a preliminary injunction to require Blackjewel to bring the idling mines into compliance.
In addition, the Appalachian Citizen’s Law Center, along with many other conservation and landowner groups across the nation, have sent letters to the bankruptcy judge, accusing the company of “severe” environmental violations at its idling coal mines out east. The groups also cite a lack of progress on the transfer of permits to new owners.
“It is unfortunately very clear that Blackjewel is allowing the mining operations for which permits remain in its possession to deteriorate and accrue mounting numbers of permit violations,” a June 17 letter from the by Appalachian Citizens’ Law Center stated.
Both Blackjewel and Eagle Specialty Materials filed objections to the claim.
The Commonwealth of Kentucky’s Energy and Environment Cabinet’s motion was continued to a later date in August during the latest bankruptcy hearing.
The court has yet to release details of the settlement and they remain sealed.
Attorneys representing hundreds of coal miners in Wyoming and other coal-producing states reached a settlement in March in a class action lawsuit brought against bankrupt coal operator Blackjewel, pending final approval by a federal judge.
The lawsuit alleged the coal operator violated federal labor law by failing to notify or compensate hundreds of workers before suddenly closing down its mines last summer. The court has yet to release details of the settlement and they remain sealed. The judge will need to issue a decision on the settlement first, according to Kentucky attorney Ned Pillersdorf.
“The settlement we reached is still judicially sealed, and it is not in the miners’ interest if one of their lawyers violates a court order and reveals what is sealed,” Pillersdorf said in a June 15 post on Facebook to a group of former Blackjewel miners. “The settlement the team of lawyers representing the miners negotiated is in the best interest of the miners.”
The class action lawsuit was filed on behalf of out-of-work Blackjewel miners and any other “similarly situated” workers who were affected by the coal mine closures last year. The intent of the lawsuit was to cover roughly 1,700 workers from former Blackjewel mines across the country.
Since the death of George Floyd at the hands of police in Minneapolis, activists across the country have pushed for change in their communities. And in many cases, their efforts at reform have begun to bear fruit.
In the weeks since marchers first took to the streets in the larger movement for police reform and against structural racism, changes in law enforcement practices and accountability have come swiftly in many places in the U.S.
In New York, the state legislature easily passed a bill to make police disciplinary records available to the public, a major policy victory for advocates of police reform there. Meanwhile, in Colorado, Gov. Jared Polis reopened a case of an unarmed black man in Aurora last year, following up on a comprehensive reform package passed by lawmakers earlier this month that, among other things, would set limits on police use of force and put rules in place to prevent fired officers from being rehired by another agency.
Protesters in Wyoming have also begun demanding changes of their own, arguing now is the time for reform and a greater understanding of issues facing people of color in Wyoming.
In Laramie, where a man was killed by sheriff’s deputy in 2018, marchers have pressed their city council to implement a citizen oversight board for law enforcement, though leaders seemed less interested in broader reforms such as a reduced police presence. In Cheyenne, activists have begun a petition to make Juneteenth, which celebrates the end of slavery in the U.S., a statewide holiday. And in Riverton – where a Northern Arapaho tribal member was killed last year after attacking an officer with a knife – locals have begun making a push to acquire their police department’s training manual and lobby for mandatory cultural sensitivity training.
“We have a lot of wounds as a people,” Rep. Andi Clifford, D-Fort Washakie, said. “Our people have a lot of wounds. Boarding schools, being beaten for speaking your language or talking to your siblings, all of that. They need to hear that history… they don’t know it and they’re not taught that history. If they really have our heart to want to protect the public health and safety, well-being of people, I think they would have an open mind and a greater understanding of why we struggle with substance abuse, because of that historical, multi-generational trauma that’s been handed down.”
Surveys of Wyoming’s corrections system over the past decade have shown the numbers of Black, Native American and Latino inmates incarcerated at disproportionate levels to whites, while personal anecdotes shared by people of color in rallies around the state have painted pictures of prejudice that vary from the subtle to the overt.
“In order to get real accountability means acknowledgement,” said Jalissa Fletcher, a University of Wyoming law student and a Cheyenne-based activist involved in the marches there. “And that’s not something that a lot of people are comfortable with. Acknowledging that there’s something wrong with our criminal justice system is tough because oftentimes, people in positions of power are close friends with people who are a part of the criminal justice system. So to say our criminal justice system as a whole has flaws and needs to be fixed may mean throwing some of your friends under the bus. A lot of people are not willing to do that if it doesn’t affect them directly.”
It seems unlikely those anecdotes will translate to immediate policy changes. While the Legislature has taken on a slate of criminal justice reforms in recent years aimed at prison sentences and recidivism, the question of police reform has rarely been raised. Some question whether it’s even necessary.
“There’s always going to be the chance for something unfortunate to happen, and I think that if there’s a better way for us to do things, I think that’s great and worthy of review,” Gov. Mark Gordon told the Star-Tribune in an interview at the height of the protests two weeks ago. “But in this particular case, I would rather do it as a thoughtful process rather than a reaction to something that happened nationally, that we look at ways that we can do a better job performing here in Wyoming under all circumstances, not just the national circumstance we see now.”
Police reform in Wyoming is a long shot this year, even with polls showing bipartisan support for it at a national level. In an election year where a number of prominent Republicans are facing primaries, a willingness to rock the boat in reaction to a national event could prove difficult for many conservatives, particularly on galvanizing issues like law enforcement.
“The appetite to take on like meaningful police reform is going to be very dependent on who’s elected this next year,” said Cheyenne Rep. Sara Burlingame, one of a handful of Democrats on the Joint Judiciary Committee. “The Judiciary on the House side is heavily stacked with former law enforcement, and I would wager an informed opinion that there’s very little appetite on their side to bring something like that.”
The reasons are many. Republican Bill Pownall, a former Campbell County sheriff who sits on the Judiciary Committee, said in an interview that he is satisfied with current levels of funding as well as current training standards, adding that any other policies should be decided at the local level. Casper Republican Art Washut, a criminal justice instructor at Casper College and fellow member of the Judiciary Committee who also served as his city’s police chief, agreed with that sentiment, writing in an email that the issues leading to disparities in policing stem from societal concerns that go beyond policy.
“There may be some need to address a few things legislatively, but I think we need a whole lot more information before we start mandating solutions to a perceived problem that we don’t fully understand,” Washut wrote in an email. “Lots of solutions may seem ideal and obvious when you are safe and comfortable in the House of Representatives. It is a whole different situation at three in the morning in a dark alley.
“We must understand that the person being confronted by the police has a role to play in how the encounter goes,” he added. “Ideally, some careful persuasion will calm the person down and the officer can resolve the incident without violence. But not everyone who is high on drugs or seriously emotionally disturbed is going to respond the way every officer wants. No matter how good the officer’s verbal skills are, there are some folks who will press the action and force will have to be used. We don’t expect and shouldn’t expect our officers to take suicidal risks.”
Then there is a question of training standards. As states like Colorado begin implementing first-of-their kind police reforms at the state level, Wyoming Association of Sheriffs and Chiefs of Police Executive Director Byron Oedekoven is quick to point out that many of the measures – a ban on chokeholds, mandatory de-escalation training, etc. – already exist in Wyoming, and that any additional training beyond that would likely require money that is likely to be cut from department budgets in the state’s upcoming spending reductions.
With a majority of department budgets already committed to paying competitive salaries for officers – a must for rural agencies already hurting for recruits, Oedekoeven said – justifying additional spending on training becomes even more difficult.
“Except for the bare necessities, training is one of the first things that goes out the window,” Oedekoeven said. “On any given Friday or Saturday night, I’ve got to have six officers on the street in order to answer the call, so that when some lady that calls and says ‘Hey somebody’s breaking the window,’ we don’t have a situation where two hours later, an officer arrives and asks ‘Hey, what happened?’”
However, lawmakers interviewed by the Star-Tribune were not completely opposed to some reforms. Pownall said that while he wasn’t in favor of extreme reforms, small changes – like sharing disciplinary records of fired officers with other agencies – could have some potential. Washut, meanwhile, noted that while he considered Wyoming to have high standards for its officers, there is always some room for improvement, including a requirement for police officers to have college degrees and, if needed, revisiting some training standards.
“One aspect of our present practice that concerns me is that officers can work the streets for up to a year before they complete basic academy training,” he wrote. “Even so, do we know that these new officers are doing improper things? Is that where the problem is? I don’t think we have that information. The average police academy in the U.S. is around 21 weeks. The Wyoming Academy is just 12 weeks. If we learn that a lack of training is at the root of the problem, that might be one place we could look.”
So what can be accomplished? In an interview with the Star-Tribune, Gordon – who often defers to local leaders on policy — said that decisions on how communities should be policed should be posed by the communities themselves. Some police departments, like Cheyenne’s, have been doing that for years, using forums like a civilian review board to keep open lines of communication with community members and to vet internal policy changes that will eventually be utilized in the field.
In the wake of Floyd’s death, Cheyenne Police Chief Brian Kozak said in interview, the group acted as a conduit between the city’s Black pastors, groups like the NAACP and the police to ensure that a similar episode would not be repeated in Cheyenne; a promise he said was only aided by the pre-existing relationships he had already established through the civilian review board.
But the board serves another purpose: helping him to set policies reflective of the wants and desires of the community.
“It’s really up to each chief and sheriff to set their policy and how professional they’re going to be,” he said. “I guess that’s one of the things that maybe consistency can help with to help guide those smaller agencies, but really I think it’s up to each community to determine what kind of police department they want.”
But there is also the greater societal question of what function police should serve, and whether governments have a greater obligation to address racism within policing. That, said Clifford, means constant education and, most importantly, a better understanding of the social disparities that are solidified, in many cases, through the criminal justice system.
Getting to that point, however, requires a willingness from those in power to listen. And in an election year, public pressure will decide whether that happens.
“Everyone wants to know what is happening right now,” said Fletcher. “We want to know, ‘What changes are you making right now?’ We don’t just want good speeches, because we’ve heard good speeches time and time again. I mean actual change. These people who are in positions of power needs to be listening to the people that they need to keep them in their comfortable, privileged positions.”
Two county party chairmen were involved in a physical altercation at this weekend’s Wyoming Republican Convention in Gillette, according to one of the officials, who said the incident left him unconscious and in need of hospitalization.
Albany County Chairman Mike Pearce said he and Carbon County Republican Party Chairman Joey Correnti were involved in a fight Saturday night at the Cam-Plex that resulted in him injuring his neck, dislocating his shoulder and breaking his ankle, the last of which required surgery at a Gillette hospital.
It is unclear what injuries, if any, Correnti — who did not answer several text messages from the Star-Tribune over the weekend requesting comment — sustained in the fight.
Pearce, an attorney, told the Star-Tribune that he hopes to pursue criminal charges following the incident and he believes it is also Correnti’s intention to pursue charges against Pearce.
The Gillette Police Department was still investigating the incident Saturday evening and did not immediately return calls Sunday requesting further details on whether any charges had been filed.
Former Wyoming Republican Party Secretary Charles Curley, who resigned following an alleged assault of Kristi Wallin, the party’s executive director, has pleaded no contest to a related charge, his lawyer said.
Pearce and Correnti had previously been friends stemming back to Correnti’s days as a member of the Albany County Republican Party, Pearce said, and worked together in Correnti’s bid against current House Minority Leader Cathy Connolly in 2016. However, their relationship appeared to sour over the weekend when Correnti approached Pearce because he said he fraternized with Correnti’s political rivals at the convention.
“He had accused me in a very aggressive way during the day,” Pearce said. “He said that I’m siding with the other side — the other side that he holds a grudge against — which was not the case at all.”
Later in the evening, Pearce — who had what he described as several “tall” gin and tonics throughout the day — attempted to pull Correnti aside in an effort to reconcile their differences. Details of their conversation and the ensuing altercation are hazy.
According to Pearce, the conversation eventually escalated. While Pearce does not remember who threw the first punch, he told the Star-Tribune that the fight that followed apparently ended with him unconscious on the floor and in need of surgery.
“My first memory is something happened to my neck, somewhere in there I threw a punch, and the next thing I know I’m on the ground and I can’t get up,” Pearce said. “People are trying to help me and I can’t walk. My ankle just went.”
"The behavior is that of the Soviet Politburo," former Rep. Barbara Cubin said of the effort. "Your action is antithetical to the principles this country was founded on."
He said the fight took place in a side room at the venue.
“If I’m culpable of anything, I accept that,” he added. “But I don’t believe that Joe is an angel here. He has issues that need to be called out that we cannot accept as a party that prides itself on working things out.”
In August, Pearce was suspended from practicing law for one year after misleading a client.
According to several attendees at the convention interviewed by the Star-Tribune, Correnti — who is known for attending GOP meetings with some form of staff-like object and a firearm holstered on his hip — had consistently exhibited aggressive behavior toward fellow party members throughout the weekend event, yelling in people’s faces and allegedly brandishing what appeared to be an ax handle at attendees. Party members from several counties said they believed Correnti was trying to physically intimidate some attendees.
“(On Saturday), there was a conversation that was quite civil, and he aggressively started charging toward one of my colleagues with a weapon, a big stick of some kind,” said Zach Padilla, a member of the delegation from Teton County.
“Joey was very aggressive,” said another Republican Party source, who declined to be named for fear of retribution. “He came at one of my delegates with an ax handle of some kind when they were at the microphone speaking — he didn’t like what she was saying — and he lunged at her with an ax handle, hollering at her.”
The source did not name the speaker.
“He was a time bomb waiting to explode,” Pearce said. “And personally, I’m embarrassed that I’m the one that had to be a part of that. It’s not in my nature to do that.”
LARAMIE (WNE) — Laramie attorney Michael Pearce, the chairman of the Albany County Republican Party, has been suspended from practicing law for one year.
In a text message Saturday night, Wyoming Republican Party Chairman Frank Eathorne denied seeing or hearing about the incident Saturday evening, telling the Star-Tribune, “Don’t know what you’re talking about.”
“I did not witness any news that you speak of,” he wrote. “I was MC’ing a wonderful dinner event.”
He encouraged the Star-Tribue to talk to Correnti himself and said he would keep an eye out for a police report. Efforts to reach Correnti have been unsuccessful.
In 2018, Charles Curley, a former secretary of the Wyoming GOP, agreed to a plea deal after being accused of assaulting then-Executive Director Kristi Wallin at a fundraising dinner earlier that winter.
Natrona County Republican Party Chairman Joe McGinley said conditions were primed for a similar altercation at this year’s event. Numerous sources told the Star-Tribune that there were a number of heated moments between members of the party’s right flank and more moderate attendees at the convention.
Currently, the state party plans on holding the event in person at the Cam-Plex in Gillette, with Kirk hosting a Friday night dinner with the state's delegation and a separate speech and private reception with attendees on Saturday.
McGinley is calling for Eathorne’s resignation because of what McGinley believes was a lack of intervention.
“This falls directly on Frank Eathorne’s shoulders,” McGinley said Sunday morning. “It’s his event; he’s the one that’s supposed to maintain order and control the room. But it was like this all day, and I’m not surprised that a physical confrontation happened during this meeting.
“At this point, he should resign,” McGinley added. “It’s embarrassing to the party.”