Two years ago, Thrasher’s company signed a deal with Southern Coal Sales Corp., an affiliate of the Roanoke-based Justice Cos., for the sale of 3.91 million tons of met and soft coking coal from its mines for $560 million, according to filings in Roanoke U.S. District Court, noted by The Times.
Thrasher agreed to the “then-prevailing high market prices,” for purchasers in Korea, Japan and China, according to the Justice companies’ filings as reported by The Times.
Upon signage, Southern Coal officials shifted a majority of coal sales away from existing buyers — including reliable and long-time customers — to supply Xcoal, the suit said, as Southern affiliates ramped up capacity. The endeavor “started numerous mines, the hiring of hundreds and purchase of tens of millions of equipment to meet demands of purchase orders,” the suit also contended, reported The Times.
In Q3 2011, however, Xcoal refused to off-load a first consignment from a Norfolk Southern Corp. train, according to the suit. “This, in turn, was devastating to profitability,” the filings said, adding that Xcoal subsequently ignored a non-publicized settlement by Q4 2013.
With court approval, the Justice companies redacted publicly available versions of the second suit. The Justice companies cited financial distress and endangerment of jobs, according to the latest suit. Xcoal has not filed a response to the current suit, and Thrasher did not return calls seeking a comment, according to The Times.
CEO of the James C. Justice Cos. Jim Justice, however, said financial “duress” hasn’t diminished his company’s overall strength and that there is no link between Xcoal’s alleged contract breach to buy coal and any other lawsuits involving Justices companies.