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Arch Coal calls coal contract objection 'wholly without merit'

Arch CoalInc. accused MidAmerican Energy Co. of making "falsestatements," and omitting central facts in an objection to its reorganizationconfirmation, calling it "wholly without merit."

The charge was in response to a Sept. 15 objection filed byMidAmerican to Arch's confirmed reorganization plan in regards to the coalproducer's assumption of six coal-supply contracts with the energy provider.MidAmerican said it made the agreement to buy coal from Arch "on certainconfidential terms and conditions," which it said the coal producer mayhave disclosed to third parties during the bankruptcy process.

MidAmerican also said the coal producer failed "todemonstrate adequate assurance of future performance of reorganized Arch coalsales of the obligations that will arise under the Contracts."

However, in the reply memorandum Arch filed on Oct. 7 in theU.S. Bankruptcy Court for the Eastern District of Missouri, the coal producersaid, "Nothing could be further from the truth."

"On September 15, 2016, two days after a successful andvirtually uncontested confirmation hearing, MidAmerican — a purchaser of[Arch's] coal under a long-term coal-supply agreement — sought to commence ameritless litigation that is a waste of judicial and party resources," theArch filing said.

Arch said in the filing that it had continued to supply coalto MidAmerican throughout the bankruptcy process without interruption and didnot provide any "plausible factual basis" that it brokeconfidentiality.

Furthermore, Arch called MidAmerican's objection a"pretext to strong-arm [Arch] to renegotiate the coal-supplycontracts" in the filing. "MidAmerican is not seeking assurance ofcoal delivery from what is likely now the country's strongest coal provider; itis looking for a way out."

Arch said in the document that it reserved the right to seeksanctions under bankruptcy rules such as covering attorney fees incurred indealing with the MidAmerican litigation.

Arch did not respond to a request for comment on thedispute, while MidAmerican said it would not comment on pending litigation.