A court battle between an Ohio bank and a West Virginia coal operator will focus on the bank's allegations the company defaulted on its loan obligations after a federal judge dismissed the coal producer's counterclaims against the bank.
Fifth Third Bancorp alleges Revelation Energy LLC defaulted on its loans multiple times and in September asked the court for a $7.2 million summary judgment. The coal company failed to make a case for pursuing claims that the bank had breached a contract or committed fraud, U.S. District Court for the Southern District of West Virginia Judge Robert Chambers wrote in a Dec. 19 order dismissing Revelation's counterclaims.
Revelation is affiliated with Blackjewel LLC, which bought Contura Energy Inc.'s Powder River Basin coal mines in late 2017. The coal company renegotiated the terms of its loans four times because it did not believe it could make more than interest-only payments, the judge noted.
When the company tried to alter the repayment terms a fifth time and the bank did not respond, Revelation said Fifth Third breached the contract between the two parties. The judge disagreed.
"Defendants then believed they could, with no indication from [the bank] that this was acceptable, unilaterally adjust their repayment terms," the judge wrote. "[Revelation's] own characterization of their actions do not follow their 'course of dealings' as alleged. For both these reasons, defendants fail to allege any contractual duty or action by plaintiff that would constitute a breach."
Chambers also dismissed a fraud claim that he said "muddled" the breach of contract claim. The judge scheduled January 2019 and March 2019 deadlines for moving the case forward through the discovery and deposition phases of the bank's claim against Revelation.