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Ousted Blackjewel CEO Hoops seeks more than $20 million

Blackjewel’s bankruptcy, at least the public portion, has played out at the Robert C. Byrd U.S. Courthouse in Charleston, West Virginia. (Google street view)

Former Blackjewel CEO Jeffery Hoops and businesses owned by him or his family seek at least $24.5 million from the estate of the coal company he was ousted from after it crashed into bankruptcy.  

The claims made on the Blackjewel bankruptcy come while other parties — including Wyoming miners, Campbell County and independent businesses stiffed by Blackjewel — still haven’t been made whole. Campbell County business owners, as well as Blackjewel employees, have accused Hoops of withholding money from paychecks and failing to pay bills.  

The claims, many filed with the bankruptcy court in late October, include a number of loans Hoops or businesses he controls made to Blackjewel LLC, which filed for bankruptcy on July 1, 2019. Hundreds of workers at Blackjewel’s two Wyoming mines were sent home that day, and went without paychecks for months. Some workers are still waiting to be reimbursed for funds that went missing from their paychecks in the months leading up to the bankruptcy. 

The Wall Street Journal has reported that the Hoops family and their companies are angling for $29 million. WyoFile identified $24.5 million. 

Hoops’ bankruptcy claims also include financial dealings between Blackjewel and other companies under his or his relatives’ control. In one instance, for example, a Hoops real estate company seeks rent owed by a different Hoops firm. 

A claim for $16,500 seeks reimbursement for a June 29 flight on Hoops’ private plane, when he flew to Wyoming to hand deliver cashier’s checks to employees here. In the days after the bankruptcy, as angry miners bashed Hoops in posts on social media, Hoops touted the maneuver in a defiant letter to Blackjewel employees. He had filled the plane with cashier’s checks and flown to Wyoming in a desperate move to ensure workers were paid after a bank cut off his accounts, he wrote in the July 4 letter. 

“MY PLANE WAS IN FLORIDA WHERE I WAS SUPPOSED TO BE WITH MY WIFE ON VACATION AND I [had] HIM FLY BACK TO CHARLESTON, WV AND THEN TO WYOMING ON SATURDAY TO DELIVER THE CHECKS AT A PERSONAL COST TO ME OF MORE THAN $16,000,” Hoops wrote (emphasis his). 

Now, Hoops wants the flight money back, according to one filing. The claim comes from an LLC called Triple H Aviation, which business records with the state of West Virginia show is run by Hoops. 

That figure is on the low end of the claims made by Hoops or associated companies. Jeffery Hoops filed a claim for $3.6 million and Jeffery Hoops Sr. asked for $3.1 million, both for loans they claimed to have made the company. Hoops or his son filed for an additional $6,900 in unnamed “business expenses.” 

Elite Industrial employees work to repair a piece of industrial equipment on July 9. The small Gillette company does repairs and electrical work for coal mines and drillers. Blackjewel owed it $20,000 when the coal company filed for bankruptcy, according to one Elite manager. (Andrew Graham/WyoFile)

Another Hoops’ LLC, Triple H Real Estate, filed claims for $7.4 million. At least $5.7 million of that amount is listed as unpaid royalty payments on coal mines in Appalachia. 

Another $212,800 is rent in office space that was to be paid by Revelation Energy, one of Hoops’ coal companies, to Triple H Real Estate. A lease document accompanying the claim has Hoops’ signature as both the landlord and the tenant. An accompanying list show Hoops’ coal company stopped paying the landlord, Hoops, in Jan. 2017. The coal company accumulated $212,800 in unpaid rent by June, 2019.

Another company, Lexington Coal Company LLC, filed around $10.4 million in claims. Lexington Coal is registered in West Virginia under the name of Jeremy Hoops, another of Hoops’ sons. The majority of its claims, $9.4 million, are also for coal royalty money.

It’s far from certain the Hoops family will get the money they’re after. Like his former employees and many small Wyoming businesses who were owed significant amounts of money when Blackjewel collapsed, many of Hoops’ loans are unsecured, meaning they are not guaranteed by Blackjewel property. 

Unsecured debts are far down the pecking order as the federal bankruptcy court in West Virginia divides up Blackjewel assets to pay back creditors. Loans secured by liens on property are more likely to be paid back. 

The $3.1 million loan Hoops claimed in his own name is secured, according to Hoops’ filing with the court. The $5.7 million in coal royalties claimed by Triple H Real Estate and the $9.4 million claimed by Lexington Coal is also secured, according to the claimants. The plane flight, the unpaid rent and other claims are unsecured. 

Employees still unpaid

Thirty-two Blackjewel employees who filed complaints with the Wyoming Department of Workforce Services’ Labor Standards Division were still owed well over half the money they’d requested as of Dec. 9, according to official testimony to a legislative committee. Those 32 employees are just a fraction of those owed money, however. Statutorily, the Labor Standards Division could only investigate and make claims for those employees who filed complaints with the office, officials said. Blackjewel had over 500 employees in Wyoming and most if not all were likely shorted on wages and benefits, according to a lawsuit filed by the U.S. Department of Labor.

Anecdotal evidence from Campbell County suggests many workers did not file claims because they feared retaliation, Labor Standards deputy administrator Kelly Rosebery told lawmakers in December. As miners waited to see if they’d get called back to work, many feared those who acted against the company wouldn’t get the call, she said.

The state paid more than $1 million in unemployment insurance benefits to workers waiting to go back to work, and close to $30,000 more under various programs to help the workers. 

Blackjewel also left unpaid $17 million in ad valorem taxes to Campbell County, which goes to fund public schools around the state, along with $11 million in state severance taxes. Deals made with the Eagle Butte and Belle Ayr mines’ new buyer, Eagle Specialty Materials, could lead to half that amount ultimately being paid back. Eagle Specialty Materials has also offered a $1.8 million fund for former Blackjewel employees. 

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UPDATE: After this story’s original publication, WyoFile located an additional $7.2 million claim made by Clearwater Investment Holdings LLC. The claim is for an unsecured loan, according to the claimant, which lists Hoops’ wife as Clearwater’s manager. —Ed.


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Andrew Graham: Andrew Graham is reporting for WyoFile from Laramie. He covers state government, energy and the economy. Reach him at 443-848-8756 or at andrew@wyofile.com, follow him @AndrewGraham88