IN THE UNITED STATES BANKRUPTCY COURT FOR THE EASTERN DISTRICT OF VIRGINIA RICHMOND DIVISION

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1 Case KRH Doc 2991 Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Main Document Page 1 of 16 Alison R.W. Toepp, Esq. (VSB No ) S. Miles Dumville, Esq. (VSB No ) REED SMITH LLP Riverfront Plaza West Tower 901 E. Byrd Street, Suite 1700 Richmond, VA Telephone: (804) Facsimile: (804) Counsel to Hugh M. Caperton, Harman Development Corporation, Harman Mining Corporation, and Sovereign Coal Sales, Inc. IN THE UNITED STATES BANKRUPTCY COURT FOR THE EASTERN DISTRICT OF VIRGINIA RICHMOND DIVISION In re: ) ) ALPHA NATURAL RESOURCES, INC., et al., ) Chapter 11 ) ) Case No KRH Debtors. ) (Jointly Administered ) ) MOTION OF HARMAN MINING CORPORATION, HARMAN DEVELOPMENT CORPORATION, SOVEREIGN COAL SALES, INC., AND HUGH M. CAPERTON FOR ENTRY OF AN ORDER (I) LIFTING THE AUTOMATIC STAY, AND (II) GRANTING RELATED RELIEF Harman Mining Corporation, Harman Development Corporation, Sovereign Coal Sales, Inc. (collectively, the Harman Companies ), and Hugh M. Caperton ( Caperton, collectively with the Harman Companies, the Movants ) hereby move (this Motion ): (i) to lift the automatic stay pursuant to Section 362 of title 11 of the United States Code (the Bankruptcy Code ), Rule 4001 of the Federal Rules of Bankruptcy Procedures (the Bankruptcy Rules ), and Rule 4001(a) of the Local Bankruptcy Rules, to permit the Movants to liquidate their claims against the Debtors in a proceeding pending in the Circuit Court of Buchanan County, Virginia against Appalachia Holding Company f/k/a A.T. Massey Coal Company, Inc. ( Massey or the US_ACTIVE

2 Case KRH Doc 2991 Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Main Document Page 2 of 16 Debtor ), and (ii) for related relief. In support of this Motion, the Movants respectfully represent as follows: PRELIMINARY STATEMENT 1. The Movants are the Plaintiffs in a lawsuit pending in the Circuit Court of Buchanan County, Virginia (the State Court ) against Massey, Case No. 027CL (the State Court Case ). The State Court Case involves claims of tortious interference with existing and prospective contractual relations, fraudulent misrepresentation, and other state law claims. A copy of the State Court Case Complaint is attached hereto as Exhibit A. 2. The State Court Case is the current iteration of litigation pending between the Movants and Massey that has spanned the better part of twenty years and numerous federal and state courts. There is, however, finally a light at the end of the litigation tunnel, which shines in the form of one final trial: a trial on damages. Massey is liable to the Movants, but the State Court must still conduct a trial to determine the amount of damages owed to Movants. That trial was halted when Massey filed the instant chapter 11 case on August 3, 2015 (the Petition Date ) in the United States Bankruptcy Court for the Eastern District of Virginia (the Bankruptcy Court ). 3. Movants file this Motion to end the final chapter of the contentious State Court Case and move beyond the devastating impact that Massey s bad acts had on the Movants businesses. Movants strongly believe that Massey will not present any compelling reason requiring the Bankruptcy Court to expend significant time and energy learning nearly twenty years worth of history simply to determine the amount of Movants damage claim. Indeed, in the interest of judicial economy and to preserve Massey s limited estate resources, the parties and the Bankruptcy Court should support the lifting of the automatic stay

3 Case KRH Doc 2991 Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Main Document Page 3 of 16 FACTUAL BACKGROUND 4. The State Court Case is a product of almost 20 years of litigation between the Movants and Massey s former Chief Executive Officer, Donald Blankenship ( Blankenship ), and his companies. This litigation include[s] suits in circuit courts in both Virginia and West Virginia, proceedings in the United States District Court for the Southern District of West Virginia, and appeals to this Court [the Supreme Court of Virginia], the Supreme Court of Appeals of West Virginia, and the Supreme Court of the United States. Caperton v. A.T. Massey Coal, Co., 285 Va. 537, 539, 740 S.E.2d 1, 1 (2013). 5. In the most recent opinion by the Supreme Court of Virginia, Chief Justice Lemons provided a thorough overview of the State Court Case s history: The lineage of this dispute is as follows. Two of Caperton s companies, Harman Mining Corporation and Sovereign Coal Sales, Incorporated, first sued one of Blankenship s companies, Wellmore Coal Corporation, in May 1998 for breach of contract. This case was litigated in the Circuit Court of Buchanan County, Virginia ( First Virginia Action ). Harman Mining Corp. v. Wellmore Coal Corp., No (Cir. Ct. of Buchanan County, Va. 1998). Caperton s companies prevailed. We later dismissed Wellmore s appeal. Wellmore Coal Corp. v. Harman Mining Corp., 264 Va. 279, 284, 568 S.E.2d 671, 673 (2002) (per curiam). In October 1998, Caperton, Harman Mining, Sovereign, and Harman Development Corporation sued A.T. Massey Coal, Incorporated, for certain tort claims in the Circuit Court of Boone County, West Virginia. Caperton v. A.T. Massey Coal Co., No. 98-C-192 (Cir. Ct. Boone County, W. Va. 1998). Blankenship was president, chief executive officer, and chairman of the board of Massey. Massey removed the case to federal court. Caperton v. A.T. Massey Coal Co., 251 B.R. 322, 324 (S.D. W. Va. 2000). The federal court later remanded the case to the Boone County Circuit Court. Caperton v. A.T. Massey Coal Co., 270 B.R. 654, 656 (S.D. W. Va. 2001); see also A.T. Massey Coal Co. v. Harman Dev. Corp. (In re Harman Dev. Corp.), No WSB-11, Adv. No , Jt. Mem. Op. and Order at 1 (Bankr. W.D. Va. Nov. 28, 2000). Back in the West Virginia circuit court, Caperton and his companies won a substantial jury verdict, which Massey appealed to the Supreme Court of Appeals of West Virginia. On its first consideration, the Supreme Court of Appeals of West Virginia reversed, but the opinion was later vacated because two justices - 3 -

4 Case KRH Doc 2991 Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Main Document Page 4 of 16 who decided the case voluntarily disqualified themselves after the decision. Caperton v. A.T. Massey Coal Co. (Caperton I), No , 2007 W. Va. LEXIS 119, at *5-6 (W. Va. Nov. 21, 2007), vacated as noted in Caperton v. A.T. Massey Coal Co. (Caperton II), 679 S.E.2d 223, 229 n. 1 (2008). On its second consideration, the Supreme Court of Appeals of West Virginia again reversed and remanded the decision of the West Virginia trial court. Caperton II, 679 S.E.2d at 229. Caperton and his companies appealed this decision to the Supreme Court of the United States, arguing that another justice should have recused himself, because Blankenship and Massey contributed millions of dollars to the justice s election campaign. The Supreme Court of the United States agreed with Caperton and his companies and reversed and remanded the case. Caperton v. A.T. Massey Coal Co. (Caperton III), 556 U.S. 868, 890 (2009). On its third consideration, the Supreme Court of Appeals of West Virginia again reversed and remanded the decision of the West Virginia trial court. The court determined that a forum selection clause in an agreement between the parties required that suit be brought in Virginia. Caperton v. A.T. Massey Coal Co. (Caperton IV), 690 S.E.2d 322, 328 (2009). Caperton and his companies subsequently filed suit in Virginia in November 2010, bringing many of the same tort claims as they did just over twelve years earlier. Caperton v. A.T. Massey Coal Co., No (Cir. Ct. Buchanan County, Va. 2011) ( Second Virginia Action ). Id. at 540, 740 S.E.2d at 2. A copy of this opinion is attached hereto as Exhibit B. 6. In the Second Virginia Action, trial Judge Vanover held that res judicata barred the Movants claims. Id. at 540, 740 S.E.2d at 2. On appeal, the Supreme Court of Virginia held that the trial court erred in determining that res judicata operates to bar the plaintiffs action. The Supreme Court of Virginia reversed the judgment of the trial court and remanded the case for proceedings consistent with its opinion. Id. at 555, 740 S.E.2d at 10. Thus, the case returned to Judge Vanover. Id. at 555, 740 S.E.2d at Between the remand of the State Court Case/Second Virginia Action in late 2013 and the five-week trial that began in April 2014, the parties served 31 subpoenas, engaged in

5 Case KRH Doc 2991 Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Main Document Page 5 of 16 depositions (15 lay witnesses and 8 experts), filed 19 motions in limine, filed 6 dispositive motions, and participated in a two-day hearing for pre-trial motions. 8. Prior to the trial, Caperton and the Harman Companies filed exhibit lists containing 456 exhibits and witness lists naming 46 potential witnesses. Massey filed exhibit lists containing 1,308 exhibits and witness lists naming 55 potential witnesses. 9. The State Court Case was tried by a jury for five weeks in April and May During the five-week trial, 23 witnesses testified (18 lay witnesses and 5 expert witnesses). Additionally, 210 exhibits in total were entered into evidence 97 by Caperton and the Harman Companies and 113 by Massey. 10. On May 23, 2014, the jury found on behalf of both Caperton and the Harman Companies and awarded damages in the total amount of $5 million, without interest, including the sum of one million dollars ($1,000,000) to Caperton. 11. In response to the verdict, both Caperton and the Harman Companies filed posttrial motions, seeking, among other things, a new trial on damages. 12. On January 7, 2015, Judge Vanover granted the new trial on damages only, finding among other things that the jury verdict was clearly inadequate and unjust and was tainted by improper conduct by Massey s counsel. A copy of the State Court s letter Memorandum Opinion is attached hereto as Exhibit C. 13. On July 22, 2015, the Harman Companies filed an Expedited Motion for Attorneys Fees (the Attorneys Fees Motion ). The attorneys fees claim is based upon a contingency fee arrangement with Reed Smith LLP

6 Case KRH Doc 2991 Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Main Document Page 6 of On August 8, 2015, Massey filed a Suggestion of Bankruptcy with the State Court as a result of the instant Chapter 11 filing. The State Court Case, including the Attorneys Fees Motion, has been stayed in accordance with 11 U.S.C. 362(a). JURISDICTION AND VENUE 15. The Bankruptcy Court has jurisdiction to consider the Motion pursuant to 28 U.S.C. 157 and This matter is a core proceeding pursuant to 28 U.S.C Venue is proper in the Bankruptcy Court pursuant to 28 U.S.C and The predicates for the relief sought herein are Section 362(d) of the Bankruptcy Code, Bankruptcy Rule 4001, and Local Bankruptcy Rule 4001(a). RELIEF REQUESTED 16. By this Motion, Movants respectfully requests that the Court enter an order, substantially in the form annexed hereto as Exhibit D: (i) pursuant to Section 362(d) of the Bankruptcy Code, Bankruptcy Rule 4001, and Local Bankruptcy Rule 4001(a), granting relief from the automatic stay to allow Movants to proceed with the trial for damages in the State Court Case; (ii) pursuant to Bankruptcy Rule 4001(a)(3), waiving any stay of such order; and (iii) granting such further relief as may be appropriate. ARGUMENT I. Legal Standard 17. Section 362(d)(1) of the Bankruptcy Code provides that a court may grant relief from the automatic stay for cause. See 11 U.S.C. 362(d)(1). While the Bankruptcy Code does not define what constitutes sufficient cause, the Fourth Circuit Court of Appeals has stated that, in examining whether cause exists, courts must balance potential prejudice to the bankruptcy debtor s estate against the hardships that will be incurred by the person seeking relief - 6 -

7 Case KRH Doc 2991 Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Main Document Page 7 of 16 from the automatic stay if relief is denied. Robbins v. Robbins (In re Robbins), 964 F.2d 342, 345 (4th Cir. 1992) (citation omitted). 18. In Robbins, the Court of Appeals for the Fourth Circuit articulated a three-factor test to determine whether sufficient cause exists to lift the automatic stay to allow stayed prepetition litigation to proceed. Courts in this Circuit must consider: (a) whether the issues in the pending litigation involve only state law, so the expertise of the bankruptcy court is unnecessary; (b) whether modifying the stay will promote judicial economy and whether there would be greater interference with the bankruptcy case if the stay were not lifted because matters would have to be litigated in bankruptcy court; and (c) whether the estate can be protected properly by a requirement that creditors seek enforcement of any judgment through the bankruptcy court. Id. (citations omitted). Other courts in the Fourth Circuit have applied the three-factor test from Robbins. See Lee v. Anasti (In re Lee), 461 F. App x 227, 231 (4th Cir. 2012) (per curiam) (applying Robbins factors in affirming lower courts decisions to lift the automatic stay to allow nonbankruptcy litigation to proceed); In re Markey, Case No , 2013 WL 64754, at *5 (Bankr. M.D.N.C. Jan. 4, 2013); In re Bi-Lo, LLC, No , 2010 WL , at *4 (Bankr. D.S.C. Aug. 13, 2010); In re Newell, No , 2010 WL , at *1 (Bankr. E.D.N.C. Jan. 22, 2010). 19. The moving party bears the initial burden of demonstrating that sufficient cause exists to justify lifting the automatic stay. See Tidewater Fin. Co. v. Cooper (In re Cooper), 296 B.R. 410, 412 (Bankr. E.D. Va. 2002) (under Section 362(d) of the Bankruptcy Code, the court should deny relief from stay if the movant fails to make an initial showing of cause ) (citations and quotation marks omitted). Only if the movant makes such a showing does any burden shift to the debtor; absent a showing of cause, the court should simply deny relief from the stay

8 Case KRH Doc 2991 Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Main Document Page 8 of 16 Mazzeo v. Lenhart (In re Mazzeo), 167 F.3d 139, 142 (2d Cir. 1999) (citations omitted); see also Secrest v. Secrest (In re Secrest), 453 B.R. 623, 633 (Bankr. E.D. Va. 2011) (stating that [t]he burden of proof is on the movant to show cause exists for relief from the automatic stay. ). 20. The Bankruptcy Court should assess the merits of the Movants Motion while heeding the direction of the United States Congress that, It will often be more appropriate to permit proceedings to continue in their place of origin, when no great prejudice to the bankruptcy estate would result, in order to leave the parties to their chosen forum and to relieve the bankruptcy court from many duties that may be handled elsewhere. S. Rep. No. 989, 95th Cong., 2d Sess. 50(1978), reprinted in 1978 U.S.C.C.A.N. 5787, In light of the comments from the United States Congress and the three-part test set forth in Robbins, the Bankruptcy Court should lift the automatic stay. II. The State Court Case Involves Only State Law Claims. 21. The first factor articulated by the Fourth Circuit in Robbins is whether the issues in the pending litigation involve only state law, so the expertise of the bankruptcy court is unnecessary. Id. The State Court Case undeniably involves state law claims. (See supra, 1). Here, the State Court possesses the necessary expertise to oversee the final chapter in the State Court Case. 22. Because a jury in the State Court Case previously found Massey liable on the underlying claims, the State Court is best suited to conduct the trial on damages. See Jalali v. Pierce Assocs., Inc., Case No , 2011 U.S. Dist. LEXIS (D. Md. Aug. 11, 2011 (noting that the bankruptcy court had modified the automatic stay in part because the claims involved issues of Virginia law better suited for resolution by the Virginia district judge who had invested substantial time in the case. ). The trial on damages is inextricably linked to the - 8 -

9 Case KRH Doc 2991 Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Main Document Page 9 of 16 underlying state law claims and may involve a review and analysis of the factual issues that were previously presented by the parties in the 2014 trial. 23. Furthermore, courts routinely hold that when state court litigation has been pending for a substantial amount of time prior the debtor s bankruptcy, it is appropriate to lift the automatic stay to allow the state court litigation to continue. See Robbins, 964 F.2d at 346; Junk v. CitiMortgage, Inc. (In re Junk), 512 B.R. 584 (Bankr. S.D. Ohio 2014) (holding that because the parties had been litigating in state court for several years prior to the debtors bankruptcy, it was appropriate to grant the creditor s request to lift the automatic stay so the state court litigation could continue); In re Salinas, Case No , 2006 Bankr. LEXIS 4523, at *10 (Bankr. D.S.C. Aug. 3, 2006) ( [B]ecause all of the issues involved in the pending state court litigation depend exclusively on state law, the expertise of the bankruptcy court is wholly unnecessary. ) (emphasis in original); Ewald v. Nat l City Mortg. Co. (In re Ewald), 298 B.R. 76, 81 (Banrk. E.D. Va. 2002) ( Modifying the stay promotes judicial economy as the state court is familiar with the facts and circumstances of the claims asserted as they have been pending there for almost three years. ). 24. Here, the litigation between the parties has been pending, in some iteration, for nearly twenty years. The State Court Case is six years old (and Judge Vanover has presided over the State Court Case for approximately five years) and is nearing completion. The subject bankruptcy case is less than a year old, and the Bankruptcy Court is unfamiliar with the underlying facts and legal issues. The lifting of the automatic stay will not delay the Bankruptcy Court s administration of the bankruptcy cases. As an example of the State Court s familiarity with the facts, between the remand of the State Court Case/Second Virginia Action in late 2013 and the five-week trial that concluded in May 2014, the State Court was involved in the issuance - 9 -

10 Case KRH Doc 2991 Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Main Document Page 10 of 16 of at least 31 subpoenas to third parties (while denying the issuance of many other subpoenas which were requested). The process involved multiple hearings and consideration of multiple motions for protective orders regarding the need for and the scope of discovery from third parties. During discovery, the State Court similarly heard multiple motions to compel the attendance of witnesses, the production of documents, and written discovery responses Of primary significance, no court, whether it be the Bankruptcy Court or the State Court is being asked to interpret state law and assign liability, if any, at this point in the case. The State Court conducted a five week jury trial, and the jury returned a verdict in favor of the Movants. The only remaining issue to be determined by the State Court is the amount of damages that will be awarded to Movants, which, given the State Court s intimate knowledge of the facts, should not be a time consuming undertaking. 26. To require the Bankruptcy Court to become familiar with years of history in the State Court Case merely to assess damages against Massey undermines efficiency and judicial economy, another relevant factor weighing in favor of lifting the automatic stay. III. Judicial Economy Compels The Lifting Of The Automatic Stay. 27. Under the Robbins decision, the Court must consider whether modifying the stay will promote judicial economy and whether there would be greater interference with the 1 Further evidence of the State Court s familiarity with the facts can be found in the significant preparation and trial time the State Court has dedicated to the State Court Case. Prior to trial, the State Court held a two day hearing that went well beyond normal business hours during which it heard nineteen separate motions in limine and four dispositive motions. During the twenty day trial that took place over five weeks, the State Court heard arguments and made numerous rulings as to the relevance and admissibility of testimony and documentary evidence. Ultimately the State Court received testimony from twenty-three separate witnesses, either live or through prior testimony (including five experts) and received 210 exhibits into evidence (97 from Plaintiffs and 113 from Defendants) plus an additional number of demonstrative exhibits that were presented but not admitted into the record

11 Case KRH Doc 2991 Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Main Document Page 11 of 16 bankruptcy case if the stay were not lifted because matters would have to be litigated in bankruptcy court. Robbins, 964 F.2d at 345. This factor seeks to avoid duplication of effort in different forums and to conserve the resources of the litigants and the courts while providing for the efficient and effective administration of the bankruptcy estate and the resolution of the action. Secrest, 453 B.R. at 629; see also In re FRG, 115 B.R. 72, 74 (E.D. Pa. 1990) (stating that stay relief to allow non-bankruptcy actions to proceed is appropriate upon a showing that the balance of hardships from not obtaining relief tips significantly in [the movant s] favor, and that a primary reason for this is to preserve the debtor s corpus by not requiring the debtor to expend its limited resources and energies in defending cases in a number of forums. ). 28. The only clear solution to promote judicial economy is for the Bankruptcy Court to lift the stay and allow the State Court to conclude the trial on damages. The current State Court Case is approximately six years old, and no one is better versed in the facts than Judge Vanover. To suggest otherwise would be to promote judicial inefficiency. Indeed, as set forth in paragraph 23 of this Motion, courts routinely lift the automatic stay to promote judicial economy by allowing courts that have been handling non-bankruptcy court litigation to oversee the litigation through completion. 29. In Salinas, the bankruptcy court readily recognized the state court s expertise in the matter and lifted the automatic stay. See Salinas, 2006 Bankr. LEXIS 4523, at *11 ( Trying the case in bankruptcy court would require me to deal with issues that the State Court has been addressing for nearly two (2) years now. Allowing the case to proceed in the forum in which it was originally filed and progressed over a two (2) year period promotes judicial economy. )

12 Case KRH Doc 2991 Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Main Document Page 12 of The second part of the inquiry under Robbins asks whether there will be a greater interference with the bankruptcy case if relief from stay is not granted because matters would have to be tried in the bankruptcy court. Id. 31. A trial on damages will interfere with the Bankruptcy Court s efficient administration of this complex bankruptcy case. The Bankruptcy Court will have to set aside significant time to become familiar with the underlying issues and for the trial. While the Bankruptcy Court is certainly capable of handling the matter, there is simply no good reason why the Bankruptcy Court should divert its attention and resources to conduct a trial on matters with which another court is intimately familiar and capable of handling. Conversely, if Judge Vanover conducts the trial on damages, the Bankruptcy Court can continue unimpeded to administer the bankruptcy cases. 32. Prolonged litigation in the bankruptcy case between the parties may cause the subject bankruptcy case to remain open for a longer period of time. In Salinas, the bankruptcy court lifted the automatic stay in part because [i]f relief from stay were not granted and if all the litigation took place in the Bankruptcy Court, with delays inherent in a new forum, the estate would remain open for a longer period of time. Salinas, 2006 Bankr. LEXIS 4523, at *12. IV. Movants Will Enforce The Award In The Bankruptcy Court. 33. The final prong under the Robbins test is whether the estate can be protected properly by a requirement that creditors seek enforcement of any judgment through the bankruptcy court. Robbins, 964 F.2d at 345. Here, the Bankruptcy Court can require, and the Movants will agree to, an order directing the Movants to enforce any judgment for damages in this bankruptcy case

13 Case KRH Doc 2991 Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Main Document Page 13 of In In re Namazi, the Bankruptcy Court for the Eastern District of Virginia lifted the stay as to the movant to proceed against the debtor in district court. 106 B.R. 93 (Bankr. E.D. Va. 1989). Key to the court s decision was the determination that the movant not docket or otherwise attempt to enforce any judgment obtained from [the] civil suit against the debtor. Id. at The Movants filed four proofs of claim against Massey. See Proofs of Claim Nos. 9, 10, 11, and 12; see also Form 410 for Proofs of Claims Nos. 9, 10, 11, and 12 filed with Kurtzman Carson Consultants, LLC on November 30, 2015, and assigned Claim Nos. 1439, 1440, 1441, and 1443, and amended Proofs of Claim assigned Claim Nos. 8331, 8333, 8339, and Claim No The Debtor scheduled Movants claims as follows: a. Hugh M. Caperton: contingent, unliquidated, disputed, and for an undetermined amount; b. Harman Development Corporation: contingent, unliquidated, disputed, and for an undetermined amount; c. Harman Mining Corporation: contingent, unliquidated, disputed, and for an undetermined amount; and d. Sovereign Coal Sales, Inc.: contingent, unliquidated, disputed, and for an undetermined amount. 36. Movants have no expectations of enforcing the award in the State Court Case outside of Debtors bankruptcy. Because Debtors scheduled each Movant s claim as unliquidated, disputed, and for an undetermined amount, Debtors will either: (i) agree with the claim amount filed by each Movant (highly unlikely), or (ii) object to each claim, which will then lead to a trial in the bankruptcy court to set the value of each claim. The Movants will readily stipulate to each claim as an allowed unsecured claim and take their respective place in the general unsecured creditor pool. Alternatively, if forced to litigate the value of each claim,

14 Case KRH Doc 2991 Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Main Document Page 14 of 16 the Court will be burdened with recycled litigation and arguments that have already been decided in the State Court. 37. By seeking relief from the automatic stay, the Movants simply want to place a monetary value on their claims so the claims can be enforced in the bankruptcy case. Movants seek nothing more than a claim fixing process in the jurisdiction most familiar with the underlying litigation. Further, Movants will agree to entry of an order lifting the automatic stay that conditions relief on Movants explicit agreement to enforce any judgment in this Bankruptcy Court. See Salinas, 2006 Bankr. LEXIS 4523, at *12 (conditioning relief from stay such that any verdict leading to a money judgment against the debtor must be enforced through the bankruptcy court. ). 38. And because the automatic stay remains in effect and applies against the Movants collection actions, there is little to no harm that can be done to the Debtors estate. See Wiencko v. Ehrlich (In re Wiencko), 99 Fed. Appx. 466, 469 (4th Cir. 2004) (finding that the automatic stay form the Debtors subsequent Chapter 11 proceeding is currently in place to prevent any collection efforts. ); see also Salinas, 2006 Bankr. LEXIS 4523, at *12 ( Relief from stay will be conditioned such that any verdict leading to a money judgment against the debtor must be enforced through the bankruptcy court. ). 39. There is no burden on Debtors or the estate, and Debtors will not be prejudiced by litigating the damage claim in the State Court. And in light of the facts that Debtors will have to determine the value of the Movants during the pendency of the subject bankruptcy case and that Movants will agree to not enforce their claim outside of this bankruptcy case, there is no credible reason to not lift the automatic stay

15 Case KRH Doc 2991 Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Main Document Page 15 of 16 CONCLUSION 40. For the foregoing reasons, Movants submit that cause exists under section 362(d)(1) of the Bankruptcy Code for the Bankruptcy Court to lift the automatic stay for the limited purpose of allowing the Movants to complete the trial on damages in the State Court Case and finally put the long and arduous litigation process behind them. WHEREFORE, the Movants respectfully request that the Bankruptcy Court enter an Order substantially in the form attached hereto as Exhibit D. Dated: July 7, 2016 By: /s/ Alison R. W. Toepp Alison R. W. Toepp (VSB No ) S. Miles Dumville (VSB No ) REED SMITH LLP Riverfront Plaza West Tower 901 E. Byrd Street, Suite 1700 Richmond, VA Telephone: (804) Facsimile: (804) Counsel to Hugh M. Caperton, Harman Development Corporation, Harman Mining Corporation, and Sovereign Coal Sales, Inc

16 Case KRH Doc 2991 Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Main Document Page 16 of 16 CERTIFICATE OF SERVICE I hereby certify that on this the 7 th day of July 2016, a true and correct copy of the foregoing was served electronically using the Court s CM/ECF system on all registered users of the CM/ECF system who have filed a notice of appearance in this matter, including Debtors counsel and the Office of the United States Trustee. /s/ Alison R. W. Toepp Alison R. W. Toepp (VSB No ) REED SMITH LLP Riverfront Plaza West Tower 901 E. Byrd Street, Suite 1700 Richmond, VA Telephone: (804) Facsimile: (804) atoepp@reedsmith.com Counsel to Hugh M. Caperton, Harman Development Corporation, Harman Mining Corporation, and Sovereign Coal Sales, Inc

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48 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) B Page 2 of 28

49 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) B Page 3 of 28

50 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) B Page 4 of 28

51 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) B Page 5 of 28

52 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) B Page 6 of 28

53 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) B Page 7 of 28

54 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) B Page 8 of 28

55 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) B Page 9 of 28

56 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) B Page 10 of 28

57 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) B Page 11 of 28

58 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) B Page 12 of 28

59 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) B Page 13 of 28

60 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) B Page 14 of 28

61 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) B Page 15 of 28

62 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) B Page 16 of 28

63 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) B Page 17 of 28

64 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) B Page 18 of 28

65 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) B Page 19 of 28

66 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) B Page 20 of 28

67 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) B Page 21 of 28

68 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) B Page 22 of 28

69 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) B Page 23 of 28

70 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) B Page 24 of 28

71 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) B Page 25 of 28

72 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) B Page 26 of 28

73 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) B Page 27 of 28

74 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) B Page 28 of 28

75 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) C Page 1 of 16

76 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) C Page 2 of 16

77 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) C Page 3 of 16

78 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) C Page 4 of 16

79 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) C Page 5 of 16

80 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) C Page 6 of 16

81 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) C Page 7 of 16

82 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) C Page 8 of 16

83 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) C Page 9 of 16

84 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) C Page 10 of 16

85 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) C Page 11 of 16

86 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) C Page 12 of 16

87 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) C Page 13 of 16

88 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) C Page 14 of 16

89 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) C Page 15 of 16

90 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) C Page 16 of 16

91 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) Proposed Order Page 1 of 6

92 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) Proposed Order Page 2 of 6

93 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) Proposed Order Page 3 of 6

94 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) Proposed Order Page 4 of 6

95 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) Proposed Order Page 5 of 6

96 Case KRH Doc Filed 07/07/16 Entered 07/07/16 15:49:48 Desc Exhibit(s) Proposed Order Page 6 of 6