Prosecution of Pike River Coal Update

Prosecution of Pike River Coal Update

Tuesday 31 July 2012

PwC Partners John Fisk, David Bridgman and Malcolm Hollis, Receivers of Pike River Coal Limited (In Receivership) (PRCL) have advised the District Court in Greymouth that no plea will be entered on behalf of PRCL in response to the charges brought against it by the Department of Labour. PRCL will take no further steps in relation to those charges.

Following the completion of the sale of the mine and related assets to Solid Energy, PRCL is in effect a bare shell. Even after the sale, the company owes substantial amounts of money to both its secured and unsecured creditors.

Mr Fisk says “We, the Receivers have no direct knowledge of the matters which are the subject of the Department of Labour’s prosecution. Given the amounts still owing to creditors, the Receivers do not consider it is in the economic interests of creditors to spend the limited funds available to the company forming a view on the merits of the prosecution or any defences to it. This is simply a pragmatic decision given the circumstances.”

Q&As sheet - Complementary to the Receivers’ news release

“Update regarding Department of Labour prosecution of Pike River Coal Limited (In Receivership” (dated 31 July 2012) Q: What are the charges against Pike River Coal Limited (In Receivership)? A: There are currently ten charges brought by the Department of Labour against Pike River Coal Limited (In Receivership) (PRCL).These relate to alleged failings of PRCL, as an employer and principal, under the Health and Safety in Employment Act at Pike River Mine on or about 19 November 2010. The charges were outlined in the Department of Labour’s press release - http://www.dol.govt.nz/news/media/2011/pike-river-parties-named.asp

Q: What have the Receivers advised the Court? A: The Receivers (PwC Partners John Fisk, David Bridgman and Malcolm Hollis) advised the District Court in Greymouth that, for economic and logistical reasons arising from the receivership, PRCL does not intend to enter any plea in response to the charges brought against it by the Department of Labour. The Court was also advised that PRCL would not take any active role in relation to the prosecution and that PRCL would not be represented at the scheduled Court hearing on 31 July (or thereafter). The Receivers made clear to the Court that t hey meant no disrespect to the Court through their decision not to enter a plea or take any active steps.

Q: Why did the Receivers decide not to enter any plea? A: The Receivers reached this decision following careful consideration of what was most appropriate in light of the company being in receivership, the Receivers’ legal duties, and economic and logistical factors. They concluded that it was most appropriate not to enter any plea.

The Receivers were appointed in December 2010.They have no direct knowledge of the matters which are the subject of the Department of Labour’s prosecution on which to base a decision as to how to plead. There are only two remaining employees of PRCL and therefore little, if any, remaining link between those currently managing the company’s affairs and the events of 19 November 2010.

Even after the sale of the Mine and related assets to Solid Energy, the company owes substantial amounts of money, to both its secured and unsecured creditors. As has been previously announced, unsecured creditors are not expected to receive any further payments.

In these circumstances, the Receivers do not believe they are in a position to take the necessary steps to form a view on the merits of the Department of Labour’s prosecution, or defences to it. It would also be costly to do so, and the Receivers do not consider this would be in the interests of the company’s creditors. PRCL is essentially now a bare shell.

Q: What happens now?

A: The next steps are up to the Court and Department of Labour. The usual process when a defendant does not enter a plea is for the Court to enter a plea of ‘not guilty’ on behalf of the defendant. The informant (i.e. here the Department of Labour) will in due course attempt to prove the essential legal ingredients of the charge against the defendant.

Q: What does this mean for the other defendants? A: The Receivers’ decision not to enter a plea only relates to PRCL. The other defendants will make their own decision as to how to plead.

ends

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