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Alpha Natural Resources will emerge from bankruptcy with a plan to cover most, if not all, of its mine reclamation costs, but the payments for the cleanup could be made as late as 2025 and depend in part on the future financial performance of the restructured company in a tough economy for the business of mining and selling coal, the Washington Post reported on Saturday. Alpha, once the nation’s fourth-largest coal company, filed for bankruptcy Aug. 3, 2015, with a string of mine reclamation sites that would cost about $700 million to restore. Many environmental groups were worried that in bankruptcy, much of that liability for cleaning up old coal mines would be lifted from the shoulders of Alpha and fall instead onto U.S. taxpayers. Under the plan approved by a federal bankruptcy judge, $293 million in reclamation liabilities would be covered by at least $209 million in cash payments into a special reclamation fund over a nine-year period. Additional funds, if needed, could come from a portion of the free cash available to a newly reorganized, privately held Alpha.

Alpha Natural Resources said yesterday that it expects to reach a deal with the U.S. government over responsibility for the cost of cleaning up mining sites, removing one of the most significant hurdles to the coal company's exiting bankruptcy, Reuters reported. Over the past few weeks, the fourth-largest U.S. coal miner and a slew of government agencies appeared to be heading for a showdown in court on Thursday, when Alpha is scheduled to ask a federal judge to approve its plan over objections. At issue is a program called self-bonding that has allowed leading coal companies to forego purchasing cleanup insurance on federal land by pledging to cover any such costs. Peabody Energy, Arch Coal and Alpha Natural Resources have all gone bankrupt in the last 11 months, leaving behind roughly $3.6 billion in self-bonding liabilities, according to securities filings. The government called Alpha's plan "fundamentally flawed" and said it was not prepared in good faith because it skirts environmental obligations, while the company has said the plan is the best way to benefit all parties. Alpha said yesterday that it anticipated reaching a deal by Thursday with the U.S. Department of Interior, Environmental Protection Agency and other agencies, according to a filing in the U.S. Bankruptcy Court in Richmond, Virginia. Alpha said a deal would include a "funding agreement" between Alpha, its lenders and a new company created to take over Alpha's best mining assets.

The Diocese of Duluth (Minn.) has filed a federal lawsuit against five insurance companies, seeking to force their participation in settlement discussions, the Duluth News Tribune reported today. The diocese, which filed for chapter 11 protection in December in the wake of a $4.9 million verdict in a child sexual abuse case, filed the suit on June 24. Mediation between the diocese and representatives of the 125 people who filed abuse claims in the bankruptcy process is set to begin on July 19. The suit names as defendants the Liberty Mutual Group, Catholic Mutual Relief Society of America, Fireman’s Fund Insurance Co., Church Mutual Insurance Co. and Continental Insurance Co. The lawsuit alleges that the companies have breached their contracts with the diocese because they have “failed to acknowledge their full coverage obligations” to cover any judgments or other legal expenses stemming from the abuse claims.

The Roman Catholic Diocese of Gallup, N.M., on Tuesday won court approval of its plan to compensate clergy sexual abuse victims, paving the way for it to exit bankruptcy, the Wall Street Journal reported today. Following a hearing at the U.S. Bankruptcy Court in Albuquerque, N.M., Bankruptcy Judge David Thuma signed off on the $25 million plan, which is largely funded by contributions from the diocese, insurance carriers, parishes and sales of the diocese’s property. The bulk of the funds will be used to compensate victims, according to Susan Boswell, the diocese’s lawyer. Fifty-seven victims filed claims against the diocese, though not all will receive a payout because of prior settlements. In return for victim compensation, the plan provides legal protections for the diocese and the other contributors that will shield them from future lawsuits tied to past abuse.

MetLife has settled some cases with its own customers who were duped by the Diversified Lending Group (D.L.G.), but a current batch of lawsuits involves people who did not buy its insurance, the New York Times reported today. D.L.G. crashed in 2008, when the Securities and Exchange Commission sued Bruce Friedman, accusing him of misappropriating millions of dollars in investor funds. According to court documents, he operated a Ponzi scheme that defrauded hundreds of investors, including a sitting congressman, of more than $200 million. Claimants in the current lawsuits were not customers of MetLife, but put their money in the D.L.G. investment that was pitched to them by sales people, some who were affiliated with MetLife and some who were independent contractors approved to sell its products. As such, the legal fight raises questions about how far a large company’s liability should extend. MetLife has argued in court documents that it “had no relationship with D.L.G.” and that it “did not sell, or materially assist in the sale” of the D.L.G. financing program. Neither was it legally obligated to supervise the brokers who made the sales, MetLife said, because they were contractors and licensed through another, unaffiliated broker-dealer, even though authorized to sell MetLife insurance products.

A federal appeals court yesterday ruled that companies cannot force their employees to sign away their right to band together in legal actions, the New York Times reported today. The U.S. Court of Appeals for the Seventh Circuit struck down an arbitration clause that banned employees from joining together as a class and required workers to battle the employer one by one outside of court. In its opinion, the three-judge panel said that Epic Systems, a Verona, Wis., health care software provider, violated federal labor law when it required its workers to bring any disputes individually to arbitration, a private system of justice where there is no judge or jury. By preventing employees from joining together in a collective action, the court said, the arbitration clause ran afoul of a critical piece of the National Labor Relations Act, a landmark 1935 law that gave workers the right to unionize and engage in concerted action.

A bankruptcy judge ordered the Roman Catholic Diocese of Duluth, Minn., and lawyers for more than 100 clergy sexual abuse victims to a three-day mediation session in July, the Wall Street Journal reported today. Court papers filed this week show that Bankruptcy Judge Gregg Zive will serve as the mediator at a conference slated to begin July 19, at the U.S. Bankruptcy Court in Minneapolis. The Diocese of Duluth, which is home to more than 55,000 parishioners, filed for bankruptcy in December after a jury awarded more than $8 million to a man who said he was sexually abused in the late 1970s by a priest working in the diocese. The diocese has said that it knew nothing about the abuse and couldn’t have prevented it. At the time it sought chapter 11 protection, the diocese faced about 18 individual abuse claims, but the number has since grown to about 110 as of Monday, according to court records. Victims’ lawyers have said that they expected more claims to come in before the deadline ran out on Wednesday. Read more. (Subscription required.) 

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The Roman Catholic Archdiocese of St. Paul and Minneapolis unveiled a bankruptcy-reorganization plan on Thursday that sets aside at least $65 million to help compensate hundreds of clergy sexual-abuse victims, the Wall Street Journal reported today. The plan was filed with the U.S. Bankruptcy Court in Minneapolis after negotiations with victims’ lawyers and the archdiocese’s insurance companies failed to produce a consensual resolution to the bankruptcy. In what is known as a “cramdown” in bankruptcy parlance, the archdiocese has asked Judge Robert Kressel, the judge overseeing the chapter 11 case, to approve the plan over victims’ objections. Victims say that the archdiocese’s actual contribution to the plan, about $13.1 million, amounts to only a small fraction of the value of the archdiocese’s total assets. The plan is largely funded by settlements with the archdiocese’s insurers. Another significant slice of the funding, about $13.7 million, is being provided by parishes’ insurance companies. About $8.7 million is coming from the sale of the archbishop’s residence and several other properties earlier this year.

Takata Corp. hired investment bankers to seek a cash infusion and negotiate with automakers over the ballooning costs it faces for rupture-prone air bags linked to 11 deaths and more than 100 injuries worldwide, the Wall Street Journal reported today. Takata tapped Lazard Ltd. to help craft a restructuring plan to help it deal with what are expected to be billions of dollars in liabilities stemming from the faulty air bags, a steering committee for the Japanese company said yesterday. The company hopes to find a financial investor or automotive company to provide more cash, and reach a deal with car makers on sharing the costs of recalling nearly 70 million air bags in the U.S. alone.

More than 200 law professors and other scholars rushed out of the gate to back the Consumer Financial Protection Bureau’s plan to prohibit arbitration clauses preventing class actions, as the formal comment period on the proposal opened this week, the National Law Review reported yesterday. Calling the proposal “critically important to protect consumers,” the group of 210 professors submitted a letter on Tuesday arguing that class actions complement resource-strained state and federal agencies in enforcing the law. The professors wrote that, by allowing financial-services companies to “eradicate consumer class actions, we are allowing these companies to insulate themselves from enforcement of our laws. This harms not only individual consumers but also the public at large.”