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UMWA gearing up to deal with Patriot Coal bankruptcy

United Mine Workers of America officials met Wednesday with officers of union locals to discuss how the recent bankruptcy filing by Patriot Coal Corp. might affect the company's 2,000 active union miners — including more than 300 at the Highland Mine in Union County — and thousands of retired UMWA miners and their dependents.

There are more than 2,000 active UMWA members working at Patriot operations at several mining complexes in West Virginia and at the Highland complex in Union County, Ky.

Also, more than 10,000 retirees receive health care benefits from the company, most of whom worked for Peabody Coal Co. before Peabody Energy Corp. spun off Patriot Coal and its West Virginia and Kentucky mines into a separate company in 2007.

In all, more than 22,000 active and retired UMWA members and their dependents — most of whom live in West Virginia, Indiana, Illinois, Kentucky and Ohio — are affected by the Patriot bankruptcy, the union said.

More than 100 UMWA local union officers, representing 35 UMWA local unions in five states, met in Charleston, W.Va.

UMWA International President Cecil E. Roberts addressed the union leaders, updating them on the status of the bankruptcy filing and explaining what the process will likely be moving forward.

Roberts pledged that "the UMWA will bring every resource to bear on behalf of our membership as this process unfolds," according to a union news release.

"You never know what will happen in bankruptcy court," UMWA Director of Communications Phil Smith said by phone Wednesday afternoon. "What frequently does happen is the company goes to the bankruptcy judge and says they either need to get out of a contract entirely or make significant changes to it."

If that involves a union contract, "The judge will say, you need to negotiate with the union," Smith said. "And we will do that."

The trouble arises if "we're requested to do something greater than what we are willing to do," he noted.

"This is several years down the road, hopefully, but it could be (in) a few months," Smith said.

Wednesday's gathering was intended as "an initial meeting" with union local officials, he said.

"We will have larger meetings, including one in Evansville in late August, for all retirees and their families" to address their concerns, according to Smith.

Meanwhile, Roberts reported that the UMWA filed a motion Wednesday to transfer the case from the U.S. Bankruptcy Court of the Southern District of New York in Manhattan, where Patriot filed it, to the Southern District of West Virginia.

"This case belongs in the coalfields," Smith said. "There is not a single ounce of Patriot coal in New York."

The union's bankruptcy court filing declared that the company's attempt to have the case heard is New York "is based on its two recently created subsidiary corporations" — Patriot Beaver Dam Holdings LLC, which was created on June 14, and PCX Enterprises Inc., which was established on June 1 — "with unidentified assets which were apparently created for the sole and express purpose of achieving venue for these cases" in the Manhattan bankruptcy court.

St. Louis-based Patriot filed its voluntary Chapter 11 bankruptcy petition on July, saying it had $3.57 billion in assets and $3.07 billion of liabilities. It has since secured an additional $802 million of financing to help it continue operating through the bankruptcy reorganization.

This summer, Patriot closed its nonunion Freedom underground mine in eastern Henderson County, laying off up to 190 people. It also operates the Patriot surface mine in Henderson County and Dodge Hill underground mine in Union County, both of which are nonunion.

Patriot has secured permission from the bankruptcy court to continue paying employees and suppliers during its reorganization.

The bankruptcy case also has implications for the former owner of Patriot's mines, St. Louis-based Peabody Energy.

"Under certain circumstances, we could be responsible for certain federal and state black lung occupational disease liabilities assumed by Patriot in connection with its 2007 spinoff from us," Peabody said in a recent filing with the Securities and Exchange Commission.

"Patriot is responsible for certain federal and state black lung occupational disease liabilities, which are expected to be less than $150 million, as well as related credit capacity in support of these liabilities. Should Patriot not fund these obligations as they become due, we could be responsible for such costs when incurred," Peabody said.

By Chuck Stinnett
The Gleaner


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