Victory for Mineworkers in Battle Against Patriot Coal and Peabody Energy

http://inthesetimes.com/working/entry/15751/victory_for_mineworkers_in_battle_against_patriot_coal_peabody_energy/

Wednesday Oct 16, 2013 3:50 pm By Mike Elk



Thousands of miners and supporters gathered in front of the Henderson County (Kentucky) Courthouse on June 4, 2013, after the bankruptcy court ruled that Patriot Coal was free of its obligation to provide retiree healthcare. (United Mine Workers of America/Facebook)


Last week, the United Mine Workers of America (UMWA) announced a settlement in its long fight with Peabody Energy that will preserve healthcare benefits for thousands of retired miners. Peabody has agreed to provide more than $400 million to start a healthcare fund for the 20,000 retired miners and beneficiaries whose retirement plans had been threatened by the bankruptcy of Patriot Coal, a Peabody spin-off (as I've previously reported).

"I am very pleased that we have been able to reach this agreement with Peabody and Patriot," said UMWA International President Cecil E. Roberts in an official statement. "This is a significant amount of money that will help maintain healthcare for thousands of retirees who earned those benefits through years of labor in America's coal mines. This settlement will also help Patriot emerge from bankruptcy and continue to provide jobs for our members and thousands of others in West Virginia and Kentucky."

UMWA has contended for years that Peabody Energy created Patriot Coal to fail, as a vehicle to offload the parent company’s retiree obligations. When Peabody Energy founded Patriot Coal in 2007, Patriot assumed financial responsibility for 40 percent of Peabody’s retiree healthcare and pensions. The next year, Patriot acquired a company called Magnum Coal, itself a spin-off of mining giant Arch Coal; Magnum brought with it $500 million in Arch’s retiree obligations. Patriot ended up with a retiree-to-worker ratio of more than 3 to 1. When Patriot went bankrupt in the summer of 2012, the company successfully pressed a bankruptcy judge to eliminate retiree obligations, leaving thousands of former workers without viable safety nets.

Months of negotiations ensued between Peabody, Patriot, UMWA and an outside investment firm, Knighthead Management LLC. A deal on retiree pensions was struck earlier this year, but healthcare remained up in the air until last Wednesday, when the parties announced a multi-part deal.

FULL story at link.