The Times West Virginian

West Virginia

March 26, 2013

W.Va. House calls on Patriot to fund benefits

Caputo tells fellow lawmakers that ‘it’s time to take a stand’

CHARLESTON — Asking the state Senate to do the same, West Virginia’s House of Delegates on Monday called for bankrupt Patriot Coal Corp. to honor its promises to around 23,000 retired miners and their families.

A non-binding measure adopted 93-4 decries the threatened loss of pension and retiree health benefits.

Estimating its liability at $1.6 billion, Patriot has warned it must end coverage for 10,000 retired miners and 13,000 dependents without court-approved relief. These people live mostly in West Virginia and four other states.

The United Mine Workers of America union has targeted Patriot as well as two other St. Louis-based operators, Peabody Energy Corp. and Arch Coal. The union has filed lawsuits alleging Peabody and Arch spun off or sold mines to Patriot to shed the related retiree benefits, setting it up to fail.

House Majority Whip Mike Caputo, D-Marion, urged support for Monday’s resolution.

A senior union officer, Caputo described how he and other UMW leaders were arrested at a January civil disobedience protest in St. Louis.

“This has happened to steel-line workers, airline workers, bakery workers, glass workers and now mine workers,” Caputo said. “Enough is enough. It’s time to take a stand.”

During the protest in January, Caputo was one of 10 people arrested for failure to disperse in front of the headquarters of Peabody Energy. That rally, organized by the UMW, included people who had worked for Peabody their whole lives. More than 750 supporters marched to the company’s headquarters to fight for the health care and other benefits of active and retired coal miners and their families.

Patriot Coal Corp. went public through a spinoff from Peabody in October 2007. In July 2008, the corporation acquired Magnum Coal Co., which formerly gained assets and liabilities from Arch Coal.

“Patriot Coal was created by Peabody and Arch coal companies to fail so that those companies wouldn’t have to pay promised benefits to retired miners and their families,” Caputo said Monday. “What’s really sad is that Peabody and Arch have the money to make this right, but I doubt that they ever will.

“Arch promised; Arch lied. Peabody promised; Peabody lied.”

With the spinoff from Peabody and purchase of Magnum, Patriot took on the responsibility of providing benefits to some of Peabody 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, senior vice presi­dent and chief financial officer 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.

During his floor speech Monday, Caputo held up pictures of retirees disabled by accident and illness who are losing health benefits and joined the UMW in the protest in St. Louis.

“They all went to jail for the first time in their lives ... pillars of their communities decided it was time to make a statement,” Caputo said.

The House resolution pledges to join the UMW in the fight to protect and maintain mine workers’ pensions and health care from assaults by these and other coal operators.

“If they get away with this, many people who are dependent on life-saving medications just simply won’t be able to afford it and they will die,” Caputo said. “There’s just no nice way to put that — they will die.”

Four Republicans voted against Monday’s resolution, including Delegate Troy Andes, an official with coal operator Alpha Natural Resources. The Putnam County lawmaker afterward said he empathizes with the Patriot retirees but questions the wisdom of the Legislature weighing in on a pending bankruptcy case.

“This case is between the United Mine Workers of America and Patriot Coal,” Andes said.

Another nay voter, Delegate John McCuskey of Kanawha County, said his law firm represents Patriot and so asked whether he should be excused from voting. McCuskey was required to vote, given the resolution’s non-binding nature.

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