Peabody Energy and several senior executives will face a class action over its handling of the North Goonyella underground coal mine fire.
The Oklahoma Firefighters Pension and Retirement System have filed a commencement of a class action for unspecified damages in the New Your District COurt on the 28th September 2020. The action will be likely joined by a range of Peabody shareholders who have witnessed the companies share value plummet since the North Goonyella disaster.
The action filed by US law firm Labaton Sucharow LLP on behalf of the shareholders states that from April 3, 2017, “Peabody emerged from bankruptcy protection and reported record production output, while simultaneously touting the Company’s “record safety” achievements and its “ongoing commitment to ensuring safe, productive operations.”
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The claim states that “Peabody Energy & Directors failed to disclose, and would continue to omit, the following adverse facts pertaining to the safety practices at the Company’s North Goonyella mine, which were privately known to or recklessly disregarded by Peabody Energy” Specifically
- That Peabody Energy had failed to implement adequate safety controls at the North Goonyella mine to prevent the risk of a spontaneous combustion event;
- Peabody failed to follow its own safety procedures; and
- As a result, the North Goonyella mine was at a heightened risk of shutdown.
The claimants state that the truth about Peabody’s inadequate safety practices was revealed when, on September 28, 2018, “fire erupted at the mine (Peabody North Goonyella), forcing Peabody to suspend operations indefinitely”
On the new of the North Goonyella mine fire, Peabody shares fell $5.54 per share, or 13.4 percent. They continued to spiral following announcement after announcement on the si
This important case also references action by the Queensland Mines Inspectorate in preventing the mine operating under routine conditions. While Peabody had gone to market touting a reopening of the mines in defined periods the Queensland Mines Inspectorate, would likely mandate a safer, cost-prohibitive approach that ultimately resulted in the mine’s closure.
The claim is based around statements made by Peabody Energy and its Directors, including Glenn Kellow, that reportedly conditioned investors to believe that its low-cost plan to restart operations at North Goonyella was reasonable and had a high likelihood of regulatory approval.
“But the underground coal mine’s omitted to disclose publicly that the plan posed unreasonable safety and environmental risks such that the Queensland Mines Inspectorate would likely “mandate a safer, more cost-prohibitive approach that would cause major delays in restarting the mine” the claim states.
The court hearings will likely to examine the role of the Queensland Mines Inspectorate in the North Goonyella mine fire debacle.
Peabody is expected to vigorously defend the campaign.
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