Roberts: UMWA Pins Patriot Bankruptcy on Peabody - Business, Government Legal News from throughout WV

Roberts: UMWA pins Patriot bankruptcy on Peabody

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Union leader Cecil Roberts says the he's ready for a fight against not just Patriot Coal, but Peabody Energy as well, even it means going to jail.

Patriot Coal, spun-off from Peabody Energy operations five years ago, recently filed for bankruptcy. Now, the United Mine Workers of America is concerned retiree benefits and obligations will be thrown out the window.

"That's just obviously not right," Roberts said in Charleston Thursday. "That's not justice, that's not fair and that's not keeping your word."

The reason the union is laying blame at the feet of Peabody Energy is it believes the company unfairly loaded Patriot with less valuable Appalachian coal assets while ascribing Patriot legacy liabilities that would overwhelm the company and send it into bankruptcy.

Peabody has argued Patriot appeared strong at the spinoff, but that  "the world and Patriot have changed significantly."

"As Patriot has indicated in its filings with the bankruptcy court, these changes included Patriot's acquisition of Magnum Coal Company, which had substantial assets and liabilities, and significant changes made in Patriot's capital structure," the spokesperson said. "We've also seen decreased demand for coal due to sharp declines in natural gas prices, the softening of the global steel markets, and more burdensome environmental and other governmental regulations that have all occurred post spin."

The State Journal examined the argument in a story published Thursday.

Roberts came to Charleston to speak on today's episode of Decision Makers. He argued that "Peabody got something very significant out of" Patriot's spin-off and subsequent bankruptcy.

"They got liabilities off of their books to enhance the value of shares that remained and they never had to pay their healthcare benefits they promised," Roberts said. "If this was such a lucrative deal, why did they get rid of these operations in West Virginia and in Kentucky? They could have retained them and made all the money they though Patriot was going to make."

The problem, Roberts stressed, is serious. The health of the union members at Patriot operations is at stake.

"This is a life and death issue with many of these retirees," Roberts said. "We have people with pneumoconiosis, we have people with heart disease we have people who‘ve had liver transplants, heart transplants. We have people, who, if they lose this coverage, will not be able to afford the drugs they need to stay alive."

Fairness at Patriot is the name of the UMWA's campaign, but Roberts was clear that Peabody would be a target of the UMWA's effort.

"We really think the really guilty party here that started this mess is Peabody,' Roberts said. "We're not going to let Peabody off the hook here. We've got cars and we know how to get to St. Louis and we know how to get to their mines that are operating. We'll be happy to stand in front of them if it comes to it. We're not going to take this lying down is the key."

Roberts added that he will go to extreme measures to ensure a fair outcome for Patriot retirees.

"I've been to jail a number of times for non-violent civil disobedience in a number of states and it looks like it's going to continue," Roberts said.

Unfortunately for the miners and retirees, bankruptcy court often does not favor unsecured liabilities such as union contracts.

"These benefits were created by collective bargaining starting in 1946," Roberts said. "If the miners had known these companies were lying to them – that they weren't going to keep these promises, they would have said give me it to me in my hand, give me more money."

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