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Coal Mine Lease Dispute Heads to Trial

Coal Mine Lease Dispute Heads to Trial

Four years after the coal mine fire that sparked the dispute, Hicks Johnson partner Logan Johnson is headed to trial court on Oct. 22 to seek $116 million in back rent from the mine’s lease holder.

WPP LLC says Hillsboro Energy LLC begin withholding quarterly lease payments for the Deer Run mine in western Illinois shortly after spontaneous combustion shut the facility down for three years.

A division of Foresight Energy LP, Hillsboro declared the March 2015 fire to be a force majeure — act of God — negating the company’s responsibility to make lease payments during the time the mine was shut down.

But WPP, a subsidiary of Houston-based Natural Resource Partners LP, notes that the man-made fire occurred when Hillsboro pumped oxygen into the mine — a well-known phenomenon in the coal mining industry.

In its 2017 annual report, NRP noted that it filed suit because Hillsboro had failed to make minimum quarterly payments of $7.5 million since the fire. The report also noted that NRP filed a second suit in April 2016 over Hillsboro’s failure to pay $9.5 million in royalties for the nearby Macoupin mine.