Martha SparksSociety Editor
October 12, 2012
On July 9, Patriot Coal Co. filed for Chapter 11 bankruptcy reorganization in the Southern District of New York.
According to the United Mine Workers President Cecil Roberts, the company mines no coal in New York, and prior to June had no offices or subsidiaries in New York.
Patriot was created less than five years ago when Peabody Energy spun off all of its operations east of the Mississippi River where the workers were represented by the UMWA, as well as a few other operations. Included in that spin-off were Peabody’s long-term health care obligations to its retirees.
Prior to the creation of Patriot, Arch Coal had sold its union operations in West Virginia to a company called Magnum Coal, into which Arch also dumped its retiree obligations. Not long after Patriot was formed, it merged with Magnum, creating a larger company with increased coal operations, but also with increased obligations to retirees and active employees.
“This company was set up to fail, in my opinion,” Roberts said in a recent United Mine Workers Journal. “This is Peabody’s and Arch’s attempt to shed themselves of their obligations under the NBCWA and the Coal Act to maintain health care benefits for active and retired employees and their surviving spouses. These companies promised, in contract after contract, to provide those benefits. But now they want to get out of paying for them. We’re going to fight to keep that from happening.”
As a first step, the UMWA retained a New York bankruptcy law firm, and filed a motion to move the case from New York to West Virginia. “This case deserves to be heard in the coalfields,” Roberts said. “All the people who will be affected by this case live in the coalfields. The company’s operations are in the coalfields. Its employees and retirees are there. Its suppliers are there. It just makes sense to have this case where the people who are most affected live and work.”
For those wanting to mail a letter requesting that the bankruptcy hearing be moved to West Virginia can mail a letter to:
Honorable Shelly Chapman
1 Bowling Green
New York, NY 1004
According to the United Mine Workers Journal, Judge Chapman is to rule on the UMWA’s motion in mid October, so there is not much time left for getting the letters in the mail.
Patriot is responsible for more than 10,000 retirees and 10,000 dependents, most of them in West Virginia, Indiana, Illinois, Kentucky and Ohio.
A judge has approved an $802 million financing package so the St. Louis company can continue operating while it restructures.
Articles from The United Mine Workers Union Journal and the Associated Press were used in this report.