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The U.S. Department of Justice has opposed a plan by coal producer Alpha Natural Resources to sell valuable assets to its creditors, which it said puts significant mine cleanups at risk, Reuters reported yesterday. The sales are part of Alpha Natural's plan to emerge from bankruptcy protection, which it filed last August in the midst of plummeting coal demand. Environmental groups have said the plan would leave the reorganized group with insufficient funds to tackle cleanups. Federal law requires coal companies to restore land they have mined, but a string of bankruptcy filings by major U.S. coal companies has raised concern among environmental agencies and the government that future mine cleanups may be at risk. "The plan as proposed is not feasible or viable in terms of providing for the completion of environmental reclamation and long-term water treatment" at the company's mining sites as required by federal law, the U.S. government said in its filing opposing Alpha's plan in U.S. Bankruptcy court in Richmond, Va. The government does not plan to approve the transfer of any federal lease or contract unless cleanups are assured, the Department of Justice said, adding that the transfer of such leases without government consent is prohibited. It said that the Environmental Protection Agency and other government departments and agencies supported its stance.

Maxus Energy Corp. filed for bankruptcy protection Friday after reaching a deal with its corporate parent, YPF SA, on the terms of a settlement tied to liabilities for the cleanup of New Jersey’s contaminated Passaic River, the Wall Street Journal reported today. The deal calls for YPF to provide Maxus, which filed for chapter 11 protection in U.S. Bankruptcy Court in Wilmington, Del., along with four other affiliates including its Tierra Solutions unit, with $130 million. In return, Maxus will drop any “alter ego” claims it may have against its parent for cleaning up the river. YPF, which is Argentina’s state-run oil company, bought Maxus Energy Corp. in 1995. A New Jersey state court ruled five years ago that Maxus and Tierra were responsible for dumping of dioxin, a highly toxic chemical and suspected carcinogen, into the river in the 1950s and 1960s. The bankruptcy filing comes days before Occidental Petroleum Corp.’s chemical subsidiary, known as OxyChem, was slated to head to court over litigation seeking to put YPF on the hook for Maxus’s environmental obligations. OxyChem purchased part of Maxus’s business in 1986.