Creditors Push Back on Legal Releases
Meanwhile, the unsecured creditors committee has taken aim at broad legal releases in the plan, claiming they would unfairly protect Heritage Coal’s current and former owners—including affiliates of KTRV and the Kestenbaum family—without any consideration.
The committee said it lacks the resources to fully investigate allegations of mismanagement and insider ties, and urged the court to delay any releases until those claims can be examined. “The record does not support the extraordinary relief of non-consensual releases,” the committee asserted.
A Web of Allegations and Legal Maneuvers
Heritage Coal, formerly operating mines in Maryland and Pennsylvania, filed for bankruptcy in March with $11.8 million in secured debt and $2.5 million in unsecured claims. The turmoil began after Chief Restructuring Officer Brian Ryniker accused former owner Angela Svonavec and her husband of wrongfully claiming liens on mining equipment pledged to secured lender Bedrock Industries Investco 1 LLC.
After a series of legal volleys, the dispute was settled in July, and the company moved forward with a plan to liquidate remaining assets and pursue litigation to repay creditors. Heritage has already generated $21.6 million from asset sales.
