Wheeling-Pittsburgh sues Massey Energy subsidiary

Wheeling-Pittsburgh Steel Corp. today filed a lawsuit in the Brooke County, West Virginia Circuit Court against Central West Virginia Energy Co. (CWVEC), a subsidiary of Massey Energy Co., alleging substantial monetary damages.

The suit charges CWVEC with breaching its long-term coal supply agreement beginning in late 2003 and continuing to the present, causing Wheeling- Pittsburgh Steel to purchase coal on the spot market at significantly higher prices than under its agreement with CWVEC.

"Massey's flagrant disregard of its long-term coal supply agreement has caused millions in dollars of damages to Wheeling-Pittsburgh Steel's business and dramatically increased the cost of our coke oven repair program," said James G. Bradley, chairman and CEO. "A reliable supply of properly blended coal is critical to our Coke Plant's operations and to the future of this company. This lawsuit is necessary to enforce a critically important contract to this company's future, and to protect our 3,400 employees who have sacrificed to rebuild Wheeling-Pittsburgh Steel into a successful company in a very competitive steel industry."

CWVEC has supplied Wheeling-Pittsburgh Steel with high volatile metallurgical coal since 1993. In 2002 during Wheeling-Pittsburgh Steel's bankruptcy process, an amended coal supply agreement was signed and approved by the bankruptcy court that extended this requirements contract through 2010. As part of that agreement, Wheeling-Pittsburgh Steel agreed to pay Massey its pre-petition receivable of $7.2 million in 60 equal monthly installments, as well as increase the base price it paid for Massey's coal. If it had not been assumed, Massey, as an unsecured creditor, would have received a minimal percentage of this amount.

CWVEC is a wholly-owned subsidiary of Massey Metallurgical Coal Inc., and it is in turn a wholly-owned subsidiary of Massey Energy.