Coal producer Oxford Resource Partners LP said in a July 21 SEC filing that it will get $19.5m out of a mediation award against western Kentucky power producer Big Rivers Electric over a Big Rivers termination of a coal supply contract.
On July 15, Oxford Mining Co.-Kentucky, LLC, a subsidiary of Oxford Resource Partners, entered into a Mediation Settlement Agreement with Big Rivers Electric that sets forth the principal terms for settlement of a 2012 lawsuit entitled Oxford Mining Co-KY LLC vs. Big Rivers Electric Corp. that was filed in the Circuit Court of Ohio County, Ky.
“Pursuant to the terms of the Settlement Agreement, Big Rivers is obligated to make a settlement payment to Oxford in the amount of $19,500,000 within thirty days after the date of the Settlement Agreement,” the SEC filing said. “The Settlement Agreement settles and releases all of the Parties’ claims and counterclaims in the Lawsuit, and the Parties will be filing for an order dismissing the Lawsuit with prejudice.”
A copy of the settlement will be filed as an exhibit to Oxford’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014.
Asked about whether there is any pending litigation with a coal supplier, Big Rivers in a Feb. 28 fuel report filed with the Kentucky Public Service Commission pointed to this case. “Since the prior report concerning this litigation, the parties have engaged in the taking of depositions and the exchange of additional documents. In November 2013, Oxford Mining Company-Kentucky, LLC asked the Ohio Circuit Court to grant it a summary judgment with respect to liability. Following the submission of briefs and oral arguments, the Court denied this motion on January 6, 2014. The case now is scheduled for trial commencing November 12, 2014, in the Ohio Circuit Court. In the meantime the parties will continue with discovery and trial preparation, and, in addition, will engage in a mediation which is to be conducted on or before July 15, 2014.”
The 800,000 tons per year contract involved in the litigation was executed in October 2007 by Phoenix Coal, an Oxford predecessor, and assumed by Big Rivers in July 2009. After Big Rivers assumed the contract, Big Rivers and Oxford entered into an amended and restated contract effective as of July 1, 2010.
Oxford filed suit against Big Rivers alleging breach of contract after Big Rivers terminated the contract over alleged shipments of off-spec coal. Oxford said it asked for permission to supply that off-spec coal, which it was allowed to do under the contract, but that Big Rivers never replied.