Times West Virginian
The bankruptcy of Patriot Coal is far more complicated than many of us will ever understand.
What complicates it is people. This isn’t just about paperwork and reorganization. The livelihood of workers and those who spent years in the mine are at stake here.
People right here in Marion County.
Patriot Coal Corp. went public through a spinoff from Peabody in October 2007. Then in July 2008, the corporation acquired Magnum Coal Co., which formerly gained assets and liabilities from Arch Coal.
With the spinoff from Peabody and purchase of Magnum, Patriot took on the responsibility of providing benefits to some of Peabody’s and Arch’s former employees and retirees. In order for Patriot to create revenue and be successful in the long run, it needs to save money related to those liabilities, according to the declaration that Mark Schroeder of Patriot Coal filed with the Bankruptcy Court.
Under Chapter 11 of the Bankruptcy Code, Patriot and its subsidiaries submitted a voluntary petition for relief on July 9, 2012, in New York, where the company had formed a subsidiary in June. In a press release, the company reported that bankruptcy filing was a way to move toward a comprehensive financial restructuring.
On Nov. 27, U.S. Bankruptcy Judge Shelley Chapman in New York made the decision to move the case from New York to St. Louis, Mo., where Patriot Coal is headquartered.
Late last month, Judge Kathy Surratt-States said that Patriot could ax its agreements with the United Mine Workers of America and slash health care coverage for retirees. Union officials say that it will affect more than 20,000.
On July 1, Patriot says it will more forward with a plan to shift retirees into a voluntary benefit plan that will be funded by giving the UMWA a 35 percent stake in the company, profit-sharing, royalties on future coal sales and the proceeds of any lawsuits they might win. But the union says that will only amount to about a quarter of the current level.
“As often happens under American bankruptcy law, the short-term interests of the company are valued more than the dedication and sacrifice of the workers, who actually produce the profits that make a company successful,” UMWA President Cecil Roberts said.
There’s probably not much that the union can achieve in mediation. An appeal has already been filed. And as far as strikes go, it could end up like Hostess all over again. The struggling company wanted to slash workers’ pay and in the face of a strike, it chose to shut its doors instead.
So what to do?
We took that question to our readers who log on each week to www.timeswv.com to vote in our online poll question. Last week we asked, “Following the decision in U.S. Bankruptcy Court that allows Patriot Coal to modify agreements with United Mine Workers, what do you think the future holds?”
And here’s what you had to say:
• Maybe I’m an optimist, but I think the union and the company can sit down and hammer out a deal that will have the least impact on retirees and current employees — 25.49 percent
• The fight has just begun. And we must never doubt the power of organized labor — 34.31 percent
• Can you say appeal? I agree with Cecil Roberts that the decision is “wrong” and “unfair.” — 40.2 percent
We’ll certainly continue to follow this issue in the coming weeks and months.
But for this week, let’s talk about road funding and what you’d be willing to pay to fix, maintain and build roadways and bridges in West Virginia.
Log on. Vote. Email me or respond online.