The West Virginia Department of Environmental Protection filed a lawsuit March 26 against ERP Environmental Fund Inc. and requested the appointment of a special receiver to assume control of its assets and operations.

The regulator's suit alleges that ERP Environmental accumulated 160 violations of state environmental laws and failed to abate 118 cessation orders, according to a filing with the Circuit Court of Kanawha County. The West Virginia Department of Environmental Protection, or WVDEP, said in a March 27 news release that it issued the 41 orders for the company to show cause on why it should not revoke its permits. ERP Environmental acquired over 100 mining permits in the wake of the bankruptcy of Patriot Coal Corp. in October 2015.

The department said ERP Environmental laid off all of its employees and management on March 20, ceasing operations and leaving its mining sites abandoned and "subject to the imminent risk of harm to the environment and the public health and safety."

"The defendant's abrupt termination of all of its management and employees and cessation of all operations has left the defendant and its mining sites, many of which have conditions that require continuous monitoring and work, without any management or control," a motion filed by the WVDEP stated.

The lawsuit was initially delayed because the court is closed due to the coronavirus pandemic. A hearing was scheduled on the matter for 1 p.m. on March 27.

"ERP essentially walked off from its operations on Friday, leaving the public exposed to health and safety concerns," WVDEP Cabinet Secretary Austin Caperton said in the news release. "The WVDEP had no option but to step in to seek the appointment of a receiver to take control of ERP's operations to protect the public health and safety."

WVDEP asked the court to bar ERP Environmental from violating state environmental laws and to appoint a special receiver to assume control of ERP Environmental's assets, operations and affairs. The state also asked for immediate injunctive relief and the temporary appointment of a special receiver. The requested order would bar ERP Environmental creditors and other parties from taking action against the company's assets and interfering with the special receiver's actions.

The department proposed Doss Special Receiver LLC to take over the company and said Indemnity National Insurance Co., which issued $125 million in surety bonds backing ERP Environmental's mining obligations, agreed to provide $1 million to Doss to fund operations for an initial 90-day period.

Records from the West Virginia Secretary of State list Thomas Clarke as treasurer of the company with an address in Roanoke, Va. Matthew Cook, whose contact information has a Madison, W.Va., address, is listed as president.

In 2018, Clarke consolidated operations acquired by ERP Environmental through distressed asset buys made in 2015 and 2016. Mission Coal Co. LLC was formed from those assets but filed for bankruptcy reorganization shortly after. In 2018, Mission's creditors asked for a probe into the company's ownership, including Clarke, over allegations of mismanagement and fraudulent behavior.

In an early 2019 filing with the U.S. Bankruptcy Court for the Northern District of Alabama, Cleveland-Cliffs Inc. warned not to offer a release from claims against insiders of Mission Coal, including Clarke.

"Tom Clarke, his known and unknown associates, and his cabal of entities have seared a path of loss and destruction that stretches across the country," Cleveland-Cliffs, a creditor to Mission, alleged in the filing. "Now that his scheme has been exposed and his alleged fortune is threatened (if it ever existed in the first place), he, and those who once trusted him, are faced with a stark reality: the emperor has no clothes."

ERP Environmental was also recently ordered to pay about $1.1 million to an environmental group after it stopped making court-ordered payments related to a selenium pollution settlement.

Clarke did not immediately respond to a request for comment.