West Virginia's environmental authority opposes a plan by bankrupt coal miner Alpha Natural Resources to sell core assets to its hedge fund lenders, saying in a court filing that it could undermine a $1 billion cleanup, Reuters reported on Friday. A string of bankruptcy filings by major U.S. coal companies, including Alpha last August, has raised concern among environmental agencies and the federal government that future mine cleanups may be at risk. The West Virginia Department of Environmental Protection said Alpha's proposed sale of certain mines would strip the company of its "crown jewels," giving it little hope of obtaining its required bonding or performing its cleanup obligations, according to an April 15 filing with the bankruptcy court. The company has agreed to sell various assets to its first-lien lenders, which will pay by forgiving what they are owed, according to court documents. Alpha is seeking court approval of the sale in May and approval for its bankruptcy exit plan in June.
