(June 10, 2010) — The $138 billion California State Teachers’ Retirement System is joining two other institutional investors in suing Massey Energy Co., accusing the embattled firm for having an “abysmal” safety record that resulted in the fatal April disaster in a West Virginia coal mine.
CalSTRS, the second-largest public pension fund in the US said Wednesday that it joined forces with Amalgamated Bank and Manville Trust as plaintiffs in a shareholder lawsuit against Massey officers and directors. While CalSTRS owns more than 336,000 shares of Massey Energy, Amalgamated holds 23,740 shares in its $11 billion LongView Collective Investment Funds and the Manville trust, Bedford, N.Y., holds 2,700 shares.
According to CalSTRS, the mine had been cited 38 times for mine ventilation violations and received 37 complaints of “accumulations of combustible materials.” In the amended complaint, CalSTRS cited a consistent failure in corporate governance, including a failure to institute appropriate safety compliance oversight and monitoring. The plaintiffs ask the court to “hold the individual defendants accountable for their misconduct, and thereby to prevent future disasters.”
The lawsuit, filed in Kanawha County, W.Va., Circuit Court, said defendants Don Blankenship, Massey chairman and CEO, and the rest of the Board breached fiduciary duties owed to Massey Energy and its shareholders “by consciously ignoring the company’s obligations to comply with federal and state law.”
The suit is reportedly seeking to recover damages for the company and not shareholder losses.
Virginia-based Masey Energy has been under investigation following an explosion at its Upper Big Branch mine in West Virginia on April 5 that killed 29 men.
To contact the <em>aiCIO</em> editor of this story: Paula Vasan at <a href='mailto:pvasan@assetinternational.com'>pvasan@assetinternational.com</a>; 646-308-2742