Early this morning, Alpha Natural Resources issued its latest quarterly financial statement, and it certainly has some interesting news:
Alpha has made significant progress toward reaching a tentative understanding to settle for $265 million the securities class action brought by Massey stockholders in early 2010 alleging deficiencies in Massey’s disclosures of safety information.
The statement continues:
Additional material terms must still be negotiated. If a definitive settlement agreement is achieved and approved by the court, the settlement would result in the dismissal of the action. Alpha expects insurance recoveries of approximately $70 million to help cover the cost of the settlement.
In connection with these developments, Alpha recorded an increase in its loss contingency accruals of approximately $115 million in the third quarter. Alpha plans to continue settlement discussions in an effort to resolve all outstanding issues, including the form of consideration. Whether Alpha can resolve those issues, and when, remains uncertain, but if the case can be resolved, it would staunch the uncertainty, distraction, risks and potential costs that pursuing this litigation would involve, and would close the book on the most significant Massey-related litigation issues passed to Alpha in the acquisition.