The Times West Virginian

Headline News

May 7, 2013

Patriot’s bid to cut benefits in judge’s hands

UMW spokesman declines to discuss prospects of strike if deal not reached

ST. LOUIS — A bankrupt St. Louis-based coal producer’s push to significantly cut thousands of retirees’ health care and pension benefits was in the hands of a judge Monday amid prospects that affected union-backed workers may strike if the ruling is in the company’s favor.

U.S. Bankruptcy Judge Kathy Surratt-States has until May 29 to decide for either Patriot Coal Corp. or the United Mine Workers of America union. A five-day hearing on the matter wrapped up Friday, and it’s not clear how soon any ruling may come.

Patriot’s proposed benefits cuts have been the most contentious aspect of its bankruptcy case since the Peabody Energy Corp. spinoff filed for Chapter 11 protection last summer. The company said it would have to spend $1.6 billion to cover the health care costs, putting it at risk of liquidation.

Looking to cease pension contributions, Patriot gave the union a proposal in March that would create a trust with up to $300 million from future profit-sharing to fund some level of health benefits. Patriot also would give the union a 35 percent equity stake in the company once it emerges from bankruptcy.

Patriot CEO Bennett Hatfield has called the moves necessary for Patriot’s survival and the preservation of more than 4,000 jobs, the bulk of them in Kentucky and West Virginia.

The union considers the cuts immoral, drastic and unfair, and an attorney for it told Surratt-States during Friday’s closing arguments that Patriot’s workers would be forced to strike if the company is allowed to walk away from its labor contracts.

Phil Smith, a spokesman for the union, declined to discuss prospects of a walkout Monday, telling The Associated Press that the union would continue trying to reach a deal with Patriot to avert or mitigate the cuts.

“I think we’re a long way from making final determinations (about a strike),” he said. “But there’s no question we still have a lot of work to do in dealing with the company to get us somewhere. At this point, we’re still in talks with the company, and I think all sides would prefer to get an agreement if there’s one to be gotten” instead of having something imposed by the bankruptcy judge.

Prospects of a strike would mirror the labor dispute involving the bankruptcy of Hostess Brands Inc. The Irving, Texas-based maker of Wonder Bread, Twinkies and other cake brands last year filed for Chapter 11 protection and later announced it was going out of business and liquidating after a nationwide strike by its bakers union crippled operations.

When Peabody jettisoned Patriot in 2007 as a separate company, union leaders have said, Patriot was saddled with unsustainable pension and long-term health care obligations.

Peabody has called that claim “a desperate attempt to rewrite history,” noting that “Patriot was highly successful following its launch more than five years ago with significant assets, low debt levels and a market value that more than quadrupled in less than a year.”

Peabody argued that on Patriot’s watch, “a series of other unforeseen events affecting all coal producers followed,” including an unprecedented global financial crisis, development of low-cost shale gas that cut demand for coal, burdensome federal regulation and a sharp dropoff in the price of Patriot’s chief product — coal used in the manufacture of steel.

Patriot earlier this year sued Peabody, saying it wants to ensure Peabody doesn’t try to use the bankruptcy to avoid health care obligations to some 3,100 retirees whose future benefits wouldn’t be part of the package Patriot proposed to the union.

Peabody last week asked Surratt-States to throw out that lawsuit; Patriot requested that she summarily decide the matter in its favor. That ruling also is pending.

1
Text Only
Headline News
  • Starved Pennsylvania 7-year-old weighed only 25 pounds

    A 7-year-old Pennsylvania boy authorities described as being so underweight he looked like a human skeleton has been released from the hospital.

    July 22, 2014

  • U.S. outlines case against Russia on downed plane

    Video of a rocket launcher, one surface-to-air missile missing, leaving the likely launch site. Imagery showing the firing. Calls claiming credit for the strike. Recordings said to reveal a cover-up at the crash site.

    July 21, 2014

  • James Garner Obit.jpg 'Maverick' star James Garner, 86, dies in California

     Actor James Garner, whose whimsical style in the 1950s TV Western "Maverick" led to a stellar career in TV and films such as "The Rockford Files" and his Oscar-nominated "Murphy's Romance," has died, police said. He was 86.

    July 20, 2014 1 Photo

  • Given life term, drug offender hopes for clemency

    From the very start, Scott Walker refused to believe he would die in prison.
    Arrested and jailed at 25, then sent to prison more than two years later, Walker couldn’t imagine spending his life behind bars for dealing drugs. He told himself this wasn’t the end, that someday he’d be released. But the years passed, his appeals failed and nothing changed.

    July 20, 2014

  • Teen’s death puts focus on caffeine powder dangers

    A few weeks before their prom king’s death, students at an Ohio high school had attended an assembly on narcotics that warned about the dangers of heroin and prescription painkillers.
    But it was one of the world’s most widely accepted drugs that killed Logan Stiner — a powdered form of caffeine so potent that as little as a single teaspoon can be fatal.

    July 20, 2014

  • Monitors try to secure Ukraine plane crash site

    International monitors moved gingerly Saturday through fields reeking of the decomposing corpses that fell from a Malaysian airliner shot down over rebel-held eastern Ukraine, trying to secure the sprawling site in hopes that a credible investigation can be conducted.
    But before inspectors ever reach the scene, doubts arose about whether evidence was being compromised.

    July 20, 2014

  • Without radar, missile may not have identified jet

    If Ukrainian rebels shot down the Malaysian jetliner, killing 298 people, it may have been because they didn’t have the right systems in place to distinguish between military and civilian aircraft, experts said Saturday.
    American officials said Friday that they believe the Boeing 777 was brought down by an SA-11 missile fired from an area of eastern Ukraine controlled by pro-Russian separatists.

    July 20, 2014

  • For Obama, foreign crises grow more challenging

    Surveying a dizzying array of international crises, President Barack Obama stated the obvious: “We live in a complex world and at a challenging time.”
    And then suddenly, only a day later, the world had grown much more troubling, the challenges even more confounding.

    July 20, 2014

  • U.S.: Can’t rule out Russian role in plane downing

    U.S. Ambassador Samantha Power told an emergency meeting of the U.N. Security Council on Friday that the United States cannot rule out that Russia helped in the launch of the surface-to-air missile that shot down a Malaysia Airlines jet over eastern Ukraine, killing all 298 people on board.

    July 19, 2014

  • Clinton papers: Of Iraq, bin Laden and Supreme Court

    President Bill Clinton’s advisers carefully considered how to explain the president’s military action against Iraq in 1998 as the House was debating his impeachment, according to records from the Clinton White House that were released Friday. The documents also touch upon Osama bin Laden, consideration of military action in Haiti in 1994 and preparationsfor Supreme Court nomination hearings.

    July 19, 2014

House Ads
Featured Ads