Alliance ordered to pay royalties

ALLIANCE Resource Partners affiliates have been ordered to pay $US3.8 million after failing to make payments to the widows and heirs of men who discovered a 200 million ton coal reserve in southern Illinois in the 1970s.
Alliance ordered to pay royalties Alliance ordered to pay royalties Alliance ordered to pay royalties Alliance ordered to pay royalties Alliance ordered to pay royalties

ARLP's Pattiki operation. Courtesy Alliance Resource Partners.

Donna Schmidt

According to the group’s legal representatives, Bailey & Glasser, Second Circuit Court judge David Overstreet recently found that White County Coal had “breached fiduciary duties” by retaining the royalties owed to the group as joint venturers.

The judgment includes unpaid royalties on 6.4Mt of coal mined at White County's Pattiki mine outside Carmi, Illinois, between 2002 and September 2009.

The reserve was discovered 35 years ago, the firm said. The plaintiffs include the widows of drilling rig operators Rector and Stone, as well as the heirs and descendants of mining geologist Colonel Oattis Parks Sr.

Alliance will be required to calculate and pay additional sums for both royalties and interest for coal mined between September 2009 and the present time. The producer must also reinstate the plaintiffs' royalty rights on some 6000 remaining coal acres.

"We are gratified by Judge Overstreet's ruling, which validates the tremendous efforts and skills of the original partners, Bill Rector, Sam Stone, Jack Fowler and Colonol Parks," Bailey & Glasser attorney Scott Helmholz said.

"These hard-working entrepreneurs had the expertise and foresight to discover a vast coal reserve. Their efforts created jobs for thousands of miners since 1977 and generated coal sales for Alliance and its predecessors exceeding $1.4 billion."

Alliance Resource Partners told ILN Tuesday afternoon that it was still reviewing the judgment but was “adamant” that the court had no basis upon which to enter judgment.

“The company intends to immediately and vigorously pursue an appeal of the decision,” the company said.

“Notwithstanding the judgment of the trial court, White County Coal continues to believe that the plaintiffs’ claims are without merit and intends to vigorously defend its position through the appellate process.”