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Judge denies multimillion claim to Alpha as Blankenship awaits sentencing

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Judge denies multimillion claim to Alpha as Blankenship awaits sentencing

A federaljudge has denied Alpha Natural ResourcesInc. restitution from former Massey Energy CEO Don Blankenship.

Courtdocuments show Alpha was seeking$27.8 million, according to a draft presentence report the defense was fighting.Alpha, which bought Massey, was seeking compensation for costs incurred as a resultof the investigation of the explosion of the Upper Big Branch coal mine that killed29 coal miners in West Virginia.

JudgeIrene Berger wrote that Alpha "was not a victim of the defendant's conduct"for the purposes related to his sentencing. The judge noted that Alpha acquiredMassey over a year after the explosion, calculated potential losses from the investigation,voluntarily cooperated with the U.S. government to reduce potential for furtherpenalties, entered into a nonprosecution agreement and adhered to that agreementby producing documents and indemnifying legal expenses of former Massey employees.

"Here,each of the decisions that resulted in Alpha's claimed losses were made after theconclusion of the conspiracy for which the Defendant was convicted in this case,were made absent any influence by the defendant, and represented an independent,intervening act severing any imaginable causal link to the defendant's conduct,"the filing states. "In basic terms, at the end of the indictment period, Alphahad incurred none of the expenses for which it claims restitution. The conspiracyfor which the Defendant now stands convicted ended without 'directly and proximately'injuring Alpha."

Accordingto the filing, prosecutors said Alpha spent $13.5 million cooperating with investigationof the Upper Big Branch explosion and prosecution of Blankenship. The company spentanother $4.3 million to represent seven former employees or officers participatingin the investigation and $10.0 million in penalties for certain safety violationsat the mine.

Alphais in the middle of a Chapter 11 bankruptcy reorganization.It is seeking to reorganize core assets into a sustainable enterprise while preparingits other mines to focus on reclamation efforts.

Blankenshipwas convicted on a misdemeanorcount of conspiring to violate mine safety laws, but a jury cleared felony chargesbrought by the prosecutors. The government is seeking the maximum penalty for hisconviction. Blankenship's defense has already hinted at an appeal.