{"id":68393,"date":"2025-11-25T00:46:07","date_gmt":"2025-11-25T00:46:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-ca\/68393\/"},"modified":"2025-11-25T00:46:07","modified_gmt":"2025-11-25T00:46:07","slug":"oakland-might-not-owe-coal-company-hundreds-of-millions-after-new-court-ruling","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-ca\/68393\/","title":{"rendered":"Oakland might not owe coal company hundreds of millions after new court ruling"},"content":{"rendered":"

Things were looking bleak for Oakland last month after a Kentucky bankruptcy judge ruled<\/a> that Oakland interfered with a coal developer\u2019s efforts to build an export terminal, forcing them into insolvency.\u00a0<\/p>\n

The judgment put Oakland on the hook for potentially hundreds of millions of dollars in damages \u2013 money the cash-strapped city would have virtually no way of covering without asking voters to approve new bond measures. It also handed a major victory to the coal company, Insight Terminal Solutions. On Monday, the New York Times <\/a>published a gloomy article speculating that Oakland was headed toward bankruptcy.\u00a0<\/p>\n

But the city won a reprieve on Friday after a federal district judge who reviewed the case found that the bankruptcy court overstepped its authority.\u00a0<\/p>\n

In a two-page order<\/a>, Judge Benjamin Beaton ruled that the bankruptcy court lacked authority to enter a final judgment on core disputes in the case. He also found that the judgment only dealt with liability, not damages, which means that it wasn\u2019t really a \u201cfinal\u201d judgment.\u00a0<\/p>\n

Beaton vacated the judgment, which gives the city a second chance to argue its case against the claims that it interfered with the coal terminal and that it owes money to the developers. He directed Oakland to submit a new motion that outlines objections to the bankruptcy court\u2019s summary judgment ruling.\u00a0<\/p>\n

\u201cThis Court will consider the substance of Oakland\u2019s disagreements with and ITS\u2019 defenses of that decision during the next phase of this litigation,\u201d Beaton wrote in his ruling.\u00a0<\/p>\n

Andrew Stosberg, an attorney for Insight Terminal Solutions, told The Oaklandside that Beaton merely vacated the \u201cfinal\u201d judgment, but did not vacate or alter the bankruptcy judge\u2019s findings of fact and conclusions of law.\u00a0<\/p>\n

\u201cIn fact, days prior to the entry of Judge Beaton\u2019s Order, my client actually presented a simple proposed stipulation to the City vacating the judgment,\u201d Stosberg wrote in an email. \u201cITS believed that was an appropriate step because the damages component of this case is unresolved. However, the City declined to enter into the stipulation for reasons unclear to ITS.\u201d\u00a0<\/p>\n

A spokesperson for the City Attorney\u2019s Offices noted that the city\u2019s legal challenges to the bankruptcy court\u2019s summary judgment order will be dealt with in the federal district court over the next two months.\u00a0<\/p>\n

\u201cThe City believes the bankruptcy court\u2019s rulings on summary judgment was wrong in numerous respects,\u201d the spokesperson told The Oaklandside in an email.\u00a0<\/p>\n

Anti-coal activists in Oakland are happy with this news. In a post<\/a> announcing the ruling, the organization No Coal in Oakland claimed that Insight Terminal Solutions had \u201cforum-shopped\u201d for a bankruptcy judge \u201cwho had no business handling the case in the first place.\u201d\u00a0<\/p>\n

\u201cWe are glad to see that a higher-ranking judge has rejected the judgment entered by the bankruptcy judge,\u201d the group wrote. \u201cWe hope this is a sign that the City will get a fairer shake as the case moves along.\u201d\u00a0<\/p>\n

Beaton is a curious savior for Oakland. He has participated<\/a> in Federalist Society event and was appointed<\/a> to the bench by Donald Trump. Early in his career, he clerked for the liberal Supreme Court Justice Ruth Bader Ginsburg.\u00a0<\/p>\n

The legal dispute dates back nearly a decade, when Insight Terminal Solutions and the developer Oakland Bulk and Oversight Terminal conceived a plan to export coal through a marine terminal stationed at Oakland\u2019s waterfront. City officials fought this proposal and engaged in a legal battle that took the parties through state and federal courts.\u00a0<\/p>\n

Insight Terminal Solutions ended up in bankruptcy court after it was unable to pay back loans. One of its creditors, Autumn Wind Lending, was to take control of Insight Terminal Solutions\u2019 lease to property on the former Army Base, which Oakland objected to in court.\u00a0<\/p>\n

Oakland lost<\/a> its other legal battle with developer Phil Tagami, who leads OBOT. A state court granted OBOT the right to keep and extend its lease to the city-owned land to restart the terminal project. Next Tuesday, the City Council will approve a partial settlement<\/a> to pay OBOT $700,000 in attorney\u2019s fees and costs. The city has also agreed to perform \u201ccertain administrative items\u201d relating to the construction and development of the terminal.\u00a0<\/p>\n

As a result, Tagami gets to keep and extend its lease on the city-owned land to restart the terminal project.\u00a0<\/p>\n

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