In re Appalachian Fuels

(Bankr. E.D. Ky. Nov. 19, 2014)

The bankruptcy court overrules the trustee’s objection to the state agency creditor’s application for an administrative expense claim for expenses to correct environmental violations. The state agency sought administrative expense status for its estimate of such expenses to be incurred in the future. The court considers whether the claims were “actual and necessary” for preservation of the estate, and ultimately concludes that they are. The court orders that the claim be paid in small amounts as needed and that a reserve of funds be maintained for the estimated future costs.

At the end of the opinion, in “A Final Mea Culpa,” the court recognizes that the plan confirmed in this case could be interpreted in a way that violates § 1129(a). The court states that it expects an appeal will follow. Opinion below.

2014-11-19 – in re appalachian fuels

The Liquidating Trustee of the Appalachian Fuels Liquidating Trust v. Energy Coal Resources (In re Appalachian Fuels)

(Bankr. E.D. Ky. Aug. 20, 2014)

The plaintiff’s complaint alleged that the individual board members for the parent entity breached their fiduciary duties to the subsidiary entity while it was insolvent. The court dismisses the complaint as to the board members holding that the board members owed a fiduciary duty to the subsidiary, but only to avoid personal self-dealing. The plaintiff had only alleged a breach of a duty of care and failed to allege that the board members advantaged themselves at the expense of the subsidiary. Opinion below.

2014-08-20 – in re appalachian fuels