Appaloosa et al strike a rich seam

Wed Feb 1, 2006

Billionaire Wilbur Ross foresaw the inevitability of a sooty Renaissance when he formed the International Coal Group in 2004, picking up cheap assets of a distressed sector. Among them was the bankrupt Anker Coal Group that sold its West Virginia Sago Mine to ICG for pennies on the dollar. But in early January, the disaster at the Sago Mine that left 11 dead served as a reminder of exactly how dirty and dangerous mining can be.

But the lawsuits expected to follow the Sago disaster, and the legal repercussions and costs sure to come, hasn't burnt out hedge fund interest or returns in the sector. Nor has the scandal dampened share prices. In fact, hedge funds have been following ICG's lead by digging into the same sorts of investments. For instance, ICG was a big stakeholder toward the end of 2005 in the Knoxville, Tenn.-based National Coal Group, which owns...

ISSN: 2151-1845 / CDC10004H

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