A Czech court has raised the temperature of an already bad tempered fight over hard coal miner OKD, a day ahead of a creditors' meeting that will decide on whether to put the company into bankruptcy proceedings or try to restructure it.

The Ostrava Regional Court rejected claims related to bonds issued by insolvent OKD and former parent New World Resources (NWR). The bulk of the claims were put forward by Citigroup as the lead agent for Ad Hoc Group (AHG), the trio of creditors that until the insolvency had controlled the miner via a conversion of bonds to equity. AHG had spent most of the time since controversial oligarch Zdenek Bakala quit NWR playing a game of chicken with the Czech government, threating to pull the plug on the company if it did not get a bail out.

The court did, however, rule that Citigroup can take part in the creditors' committee meeting set up for August 11. The Czech government, which has approved limited loans to OKD since it became insolvent, has said it hopes the creditors will decide to restructure the company. While the government has long accepted that OKD is a lost cause in the long run, it is keen to avoid a sudden shutdown of its mines in the east of the country, which employ around 13,000.

However, the court ruling did little to alleviate the bitter atmosphere that has grown between AHG – which features funds Grammercy, M&G, and Ashmore – and the Czech state. "The statements and arguments made in the effort to deny Citibank's claims directly contradict all available evidence and documentation," an AHG spokesman said ahead of the ruling. "The insolvency filings as well as the statements made by Citibank which are available in the insolvency register are clear proof of that."

The rejected claims relate to bonds worth €352mn and a €35mn super-senior credit facility. Around CZK10bn of the rejected claims were put forward by Citigroup.

In reaching its verdict, the court followed the line of the state administrator appointed in May, who has questioned whether AHG has proved that the claims really stem from OKD, reported Radio Praha. Citibank can still go to court to get its claims recognized and can also launch an international arbitration against the Czech state, something which it has strongly hinted it is more than willing to do.

A CZK1.8bn claim from the Ministry of Industry and Trade – AHG's main opponent in the case –for the likely liquidation costs of closing the deep mines if operations at OKD cease was also rejected.

The verdict leaves rail freight carrier Advanced World Transport as the biggest NWR creditor with around CZK460mn in recognized claims. The difficulties at OKD, one of AWT's biggest customers, has sparked controversy in Poland, due to the purchase of the Czech rail group last year by Polish peer PKP Cargo.