EPA v. FRASURE CREEK (BNK) (TRINITY COAL, ET AL)

Case summary

On August 30, 2013, the United States filed seven proofs of claim in the Eastern District of Kentucky, as a government creditor in a Chapter 11 bankruptcy proceeding. The United States filed these claims against the following debtors: Frasure Creek Mining, LLC; Bear Fork Resources, LLC; Trinity Coal Corporation; Trinity Parent Corporation; Trinity Coal Partners, LLC; Falcon Resources, LLC; and Prater Branch Resources, LLC; for a claim of at least $5 million. These claims stem from litigation brought forth in the United States District Court for the Eastern District of Kentucky, Southern Division, Pikeville, by the United States against eight defendants, for violations of the Clean Water Act (United States v. Frasure Creek Mining, LLC, et al., Case No. 12-cv-00056-ART). In the complaint, the United States requested injunctive relief and civil penalties for the unauthorized discharge of pollutants into waters of the United States, in conjunction with surface mining activities on two sites located in Floyd, Magoffin, and Pike Counties in Kentucky. Subsequently, seven of the eight defendants became involved as debtors in the above-referenced bankruptcy proceeding. The proof of claim was filed in order to preserve the claims against these seven bankrupt parties. On Jan 31, 2014, a Joint Stipulation was filed and entered with the U.S. Bankruptcy Court for the Eastern District of KY, by the U.S. and the defendants, in a bankruptcy case that is associated with the civil case of U.S. v. Frasure Creek Mining, LLC, et al. The stipulation entitles the U.S. to receive a pro rata recovery of its stipulated claim value of $4.5 million from the bankruptcy trust but will be guaranteed to receive a total amount of $700,000, which constitutes the civil penalty in this case. Any deficiency of the $700,000 from the bankruptcy trust will be paid to the u.s. by Essar Minerals, Inc., and that payment will be guaranteed by 2 newly forming companies, New Trinity Coal, Inc. and New Resources, Inc.

Defendants (7)

• BEAR FORK RESOURCES, LLCNamed in complaintNamed in settlement
• PRATER BRANCH RESOURCES, LLCNamed in complaintNamed in settlement
• FALCON RESOURCES, LLCNamed in complaintNamed in settlement
• TRINITY COAL PARTNERS, LLCNamed in complaintNamed in settlement
• TRINITY PARENT CORPORATIONNamed in complaintNamed in settlement
• TRINITY COAL CORPORATIONNamed in complaintNamed in settlement
• FRASURE CREEK MINING, LLCNamed in complaintNamed in settlement

Facilities (2)

• FRASURE CREEK MINING, LLC

  OFF OF KY ROUTE 850 ON PRATER BRANCH ROAD, PYRAMID, KY, 41616

  Registry ID: 110041879296

• FRASURE CREEK MINING, LLC

  BEAR FORK-SAM HALL BRANCH ROAD, ROBINSON CREEK, KY, 41501

  Registry ID: 110043464060

Statutes cited

• CWA 301 — NPDES Discharge without a Permit
• CWA 404 — Permits for Dredge and Fill Material

Enforcement conclusions (1)

• FRASURE CREEK (BNK) (TRINITY COAL, ET AL) (04-2014-C019)entered 2014-01-31

  Primary law: CWA

  Federal penalty: $700,000

Timeline (7 milestones)

• 2013-07-03Referred To Dept Of Justice
• 2013-08-08Enforcement Action Data Entered
• 2013-08-30Complaint Filed With Court
• 2013-08-30Final Order Lodged
• 2014-01-31Concluded
• 2014-01-31Final Order Entered
• 2019-02-26Enforcement Action Closed