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Bankruptcy Keyed to Howard 7th Ed.
Alabama Surface Mining Commission v. N.P. Mining Co. (in re N.P. Mining Company)
Citation:
963 F.2d 1449 (1992)Facts
N.P. Mining Company operated coal mining operations through surface mining in Alabama. After filing for Chapter 11 bankruptcy protection on February 6, 1987, N.P. continued operations as debtor in possession until June 15, 1988, when a Chapter 11 trustee was appointed. The ASMC, responsible for enforcing Alabama’s surface mining laws, conducted monthly inspections and assessed penalties for environmental violations both before and after the bankruptcy petition. The penalties were purely punitive and unrelated to actual environmental cleanup costs, which were covered by reclamation bonds totaling over two million dollars paid by N.P.’s insurer. During the debtor-in-possession phase, the ASMC assessed $399,700 in fines. After the trustee’s appointment and cessation of mining operations, an additional $1,949,400 in penalties accumulated, primarily because violations remained unabated. The trustee’s activities were limited to preserving assets and maintaining a coal-brokering contract. The case was converted to Chapter 7 liquidation on April 14, 1989, with approximately $400,000 to $500,000 remaining in the estate.
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