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Labor law board files complaint against Cobalt Coal over director-imposed liens

The National Labor Relations Board filed a complaint against Cobalt Coal Ltd. to void certain liens imposed against the company by a former director.

The board asked a federal court to avoid more than $1.7 million of the principal debt the Canada-based coal producer incurred to Al Kroontje, who previously served as a director and since April 2014 has had "sole signatory authority over Cobalt's bank accounts and has been in possession and control of Cobalt's books and records," according to the Sept. 17 complaint filed with the U.S. District Court for the Western District of Virginia.

Cobalt Coal, which owns a coal mine in Virginia, did not receive any value in return for the debt, the board alleged.

Since Jan. 1, 2014, the sum of Cobalt Coal's debts exceeded the fair valuation of its assets, and the company was generally not paying its debts when they were due, according to the complaint.

When the company incurred these debts to Kroontje, "Cobalt's remaining assets were unreasonably small in relation to the business it was engaged in," the board said. Cobalt Coal should have believed that it would incur debts that it would not be able to repay on time, the board said.

The labor board is also seeking an order deeming the Kroontje debenture partially fraudulent and "avoiding certain transactions" to the board's prior claim in an execution lien created in a previous case between the parties.