UPDATE 8/22/13 @ 1:45 p.m.
ST. LOUIS (AP) - Coal-producing Peabody Energy Corp. is applauding a court ruling that it remains obligated to continue health-care benefits for some 3,100 retirees of one of the company's former holdings.
An 8th U.S. Circuit Court of Appeals' bankruptcy panel on Wednesday overturned U.S. Bankruptcy Judge Kathy Surratt-States' May ruling that Peabody no longer was obliged to pay the benefits. That ruling linked to the bankruptcy of Patriot Coal Corp., which Peabody spun off in 2007.
While the United Mine Workers of America union cheered Wednesday's development, Peabody says the panel didn't rule on the level of funding required to meet future obligations.
Peabody adds the court found the company was obligated to make the payments until a new labor agreement was approved between Patriot and the UMWA. That came in recent days.
A three-judge U.S. Court of Appeals' bankruptcy panel on Wednesday overturned a St. Louis bankruptcy judge's May ruling in St. Louis-based Peabody's favor.
The dispute affects the largely Midwestern retirees of Heritage Coal Co. and was linked to the bankruptcy of Patriot Coal Corp., which Peabody also spun off in 2007.
A message was left Wednesday seeking Peabody comment about the appellate ruling.
Patriot earlier this year sued Peabody, seeking to ensure Peabody didn't try to use the bankruptcy to avoid the debated health-care obligations.
The head of the United Mine Workers of America union calls Wednesday's ruling "bright ray of good news."
U.S. Bankruptcy Judge Kathy Surratt-States on Tuesday granted St. Louis-based Patriot's request to put in place the collective bargaining deal ratified Friday by the United Mine Workers of America.
The settlement restores most wage cuts that Patriot had sought as part of its reorganization. Pension benefits for thousands of retirees are maintained, and active employees will continue earning pension credit.
Last week, about 1,800 union members approved the agreement with 85 percent approval. Patriot operates mines in West Virginia and Kentucky.
Patriot has said the agreement will save $130 million a year for the next four years.
The union said in a statement Friday night that current or laid-off Patriot workers in West Virginia and Kentucky voted 85 percent to 15 percent in favor of the agreement reached late last week.
Some 1,800 members from 13 locals were voting.
Patriot said it wants the company to survive, and union President Cecil Roberts had said the deal may let that happen.
The settlement would restore most wage cuts that Patriot had sought as part of its reorganization.
Roberts says the deal also reduces the restoration of some benefits and the continuation of others.
Pension benefits for thousands of current retirees would be maintained, and active employees would continue earning pension credit.
Members of the United Mine Workers of America on Wednesday heard details of the settlement reached last week with St. Louis-based Patriot.
Some 1,800 current or laid-off Patriot workers in West Virginia and Kentucky will be eligible to cast a ballot on Friday.
The union says the proposed settlement includes restoration of all but $1 per hour in wage cuts.
Wages would increase annually by 50 cents an hour starting in January 2015, monthly premiums for health care benefits would be eliminated, pension benefits for thousands of current retirees would be maintained and current active UMW members would continue earning pension credit.
The UMWA will be reviewing the terms of the agreement with its membership this week as it prepares for a ratification vote.
The vote will take place on Friday, Aug. 16. Some 1,800 active or laid-off members in West Virginia and Kentucky are eligible to vote.
“After several weeks of nearly around-the-clock negotiations, I believe we have reached something that can be taken to the membership for ratification,” UMWA International President Cecil E. Roberts said. “We have been able to restore, or at least improve upon, many of the most drastic changes that the Judge ordered, including in the area of wages, health care benefits, paid time off, pensions, and more. In addition, we have negotiated a mechanism that will allow retiree health care benefits to continue.”
"This represents the successful conclusion of a difficult negotiation in which both the UMWA leadership and Patriot management have invested many long days. Both parties want to preserve jobs and protect healthcare benefits for retirees by keeping Patriot on track for reorganization – and not liquidation," said Patriot President and Chief Executive Officer Bennett K. Hatfield. "We appreciate the cooperation of the UMWA leadership and the sacrifices of all of our employees and retirees as we work to restore Patriot to viability."
The Company will also be filing a motion with the Bankruptcy Court in St. Louis seeking authorization to enter into this agreement.
The union will not release details of the settlement until after those members have had a chance to hear terms of the agreement.
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Their fight is against Patriot Coal. After going bankrupt, it was decided in court that the company could cut its agreement with the UMWA.
That means lower wages, fewer benefits and less health care for retirees.
About 5,000 coalminers and supporters rallied in the rain against Patriot. Thirty of them, including UMWA president Cecil Roberts, were even arrested for the cause.
Patriot claims that the changes being made are significantly better than what the court approved.
However, union members say that's not good enough.
“We're gonna make them keep their promise,” Roberts said. “They've broken a promise to the wrong bunch.”
The union says it will continue fighting for as long as it takes.
“That's what coal miners have always been about. That's what we're about today. We're gonna fight one day longer than the company,” UMWA spokesperson Phil Smith said.
Patriot Coal has vowed to continue providing the current health care to retirees through August.
The company is still meeting with the UMWA, and hopes to come to a resolution by the end of July.
Tuesday's rally comes exactly one year after Patriot announced it was filing bankruptcy.
UMWA President Cecil Robertson and AFL-CIO Vice President Arlene Holt-Baker are among those arrested.
The UMWA says 5,000 people attended Tuesday's protest in Fairmont.
They came from Alabama, Illinois, Kentucky, Missouri, Ohio, Pennsylvania, Virginia and West Virginia.
United Steelworkers President Leo Gerard told the crowd that every union is threatened if Patriot gets away with shedding legacy costs and breaking promises.
Last week, Patriot said it's imposing less severe wage and benefit cuts on its miners than it could have under a court ruling. The company also said it will keep retired workers' health plans unchanged for the next two months.
President Cecil Roberts, United Steelworkers President Leo Gerard and AFL-CIO Executive Vice President Arlene Holt are scheduled to speak Tuesday at 10 a.m. in Fairmont.
The UMWA booked 25 buses for the event. Other protesters are driving in.
People are coming from Alabama, Illinois, Kentucky, Missouri, Ohio, Pennsylvania, Virginia and West Virginia to protest St. Louis-based Patriot's planned cutoff of retiree health benefits, and wage and benefit reductions for active miners.
Union spokesman Phil Smith says there have been 13 previous rallies: eight in St. Louis; three in Charleston; one in Evansville, Ind.; and one in Henderson, Ky.
But St. Louis-based Patriot Coal Corp. added Tuesday that it will keep retiree health care benefits unchanged for the next two months.
Patriot didn't detail the cuts it has adopted, more than a month after a bankruptcy judge empowered Patriot to abandon its collective-bargaining agreements.
Patriot says its continued bargaining with the United Mine Workers of America union has produced "substantial progress."
A spokesman for the union isn't talking publicly about Patriot's cuts imposed Monday, saying only that the union is still meeting with the company to make further improvements over the bankruptcy court's order.
U.S. Bankruptcy Judge Kathy Surratt-States on Wednesday approved of Patriot Coal's request to impose wage and benefit cuts by throwing out its collective-bargaining agreements with the United Mine Workers of America.
St. Louis-based Patriot sought bankruptcy protection last summer to address labor obligations it said have grown unsustainable. The Peabody Energy Corp. spinoff has said it would have to spend $1.6 billion to cover the health care costs, putting it at risk of liquidation.
The union had called the proposed cuts immoral and unfair.
For months, George and Jennifer Scott have been worried, watching and waiting for word on the decision.
"I'm in limbo,” Jennifer said. “I don't know what to do."
George is a retired coal miner. He spent decades working at the Hobet mine in Boone County.
The couple spends $13,000 a year in medication. They say Patriot’s plans to do away with health benefits could be a deadly blow.
"I ain't gonna get by,” George said. “I'm just going to have to lay down and die."
"They might as well put a gun to our heads and shoot us," Jennifer said.
After hearing the bankruptcy court's ruling in favor of Patriot's plan, a small crowd of fellow Hobet mine retirees got together at the Scotts’ home in Julian in Lincoln County. All were devastated, afraid and frustrated.
"I spent my whole life working for retirement,” Harold Elkins said. “Now I've been retired two years and lost it all."
"I think the judge sentenced people to death because when they don't have their medical coverage, they're going to die," Harold’s wife Rita Elkins said.
"It’s just a sad reflection on the legal system, I think," retired miner Jackie Collins said
Under the court's ruling, Patriot can stop paying healthcare benefits as early as July 1.
The union says they will be appealing the decision.
Attorneys for Patriot Coal Corp. and the United Mine Workers of America were to argue the matter Monday in U.S. Bankruptcy Court in St. Louis. The hearing was set to begin at 11 a.m.
St. Louis-based Patriot filed for Chapter 11 bankruptcy last summer.
Patriot was separated off from Peabody Energy Corp. in 2007. Patriot hit hard times in recent years, with the company citing exceptionally soft coal markets, rising costs and "unsustainable legacy liabilities" tied to the spinoff.
The union says Patriot was set up to fail in a deliberate plan to end benefit obligations to retirees. Patriot and Peabody deny that claim.
Peabody Energy released the following statement concerning Monday's proceedings.
"The Union continues to grandstand when it knows that this matter will be decided in the courts. Patriot was highly successful following its launch more than five years ago with significant assets, low debt and a market value that more than quadrupled in less than a year.
Peabody has lived up to its obligations and continues to do so. This is a matter between the union and Patriot Coal, and will be decided in the bankruptcy court. "
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Patriot Coal proposed the plan during a hearing in federal court.
Patriot is a spin-off company from Arch Coal and Peabody Energy.
Charles Bella worked for Arch Coal and had never even heard of Patriot when he retired in 1999.
“I have to take blood pressure medicine, cholesterol and stuff like that,” Bella said. “And a person's not just gonna be able to pay these high prices out of their pockets.
Bella says that's what would happen if the company gets its way.
“We've been promised healthcare and pension cradled until death,” Bella said.
For the past few months, Bella and many others have made trips to St. Louis to protest the possibility of Patriot throwing out its contract with the UMWA.
Thursday, Patriot made the plan official by proposing it in court.
"We very much regret the necessity of these changes to our employees' and retirees' wages and benefits," Bennett Hatfield, Patriot President and CEO said. "However, these actions are necessary for Patriot to become viable and continue to provide more than 4,000 jobs. We believe the alternative of liquidating Patriot would do far greater damage to the employees and retirees who depend on this company."
Bella says he doesn't buy that.
“They want to keep it for themselves. That's just corporate greed,” Bella said. “I just hope the judges realize what's at stake here.”
He and many others are already planning their next trip to St. Louis. It's set for Tuesday.
Patriot has also filed a lawsuit against Peabody Energy to make sure it doesn't use Patriot's bankruptcy to escape its own healthcare obligations to retirees.
There’s no word on when a decision about the union contract is expected to be made.
In a filing on Thursday, the St. Louis-based company also asked the judge to modify the health-care plan covering thousands of retired miners.
Patriot didn't publicly disclose the exact terms of its proposal and asked the judge to allow those details to be filed under seal.
The company filed for Chapter 11 bankruptcy protection in July while it tries to reorganize its finances and operations, including what Patriot has called "unsustainable labor-related legacy liabilities."
In a statement, UMWA President Cecil Roberts called the proposal "totally unacceptable" and "unnecessary."
Patriot has 12 mining complexes in Appalachia and the Illinois Basin.
Picketing was planned for Wednesday morning in St Louis by UMWA members outside the headquarters of Peabody Energy. That's one of the companies the union accuses of orchestrating business deals that bankrupted Patriot Coal.
The union says most of the 20,000 people whose benefits may be affected by Patriot's Chapter 11 bankruptcy are largely in West Virginia, Kentucky, Ohio , Illinois, and Indiana..
Peabody, which spun off Patriot in 2007, has said it has "lived up to its obligations and continues to do so," and that the dispute is solely between the union and Patriot.
The fight between the United Mine Workers of America and Patriot Coal continued in St. Louis, Miss., on Tuesday and ended with the arrest of 10 picketers, including UMWA president Cecil Roberts, for obstructing traffic.
"Ten of them got out in the middle of the street and just sat down. Locked arms, sat down and they wasn't getting back up. But they said prayers and sung 'Amazing Grace' until they took them away," said Hillary Justice, the daughter of a coal miner who traveled from West Virginia to take part in the protest.
At the time of the arrests, the UMWA was protesting outside the headquarters of Peabody Energy, which is one of the companies the union holds responsible for Patriot Coal’s bankruptcy.
"It was built by people like us," Justice said. "We built them. We got them to where they are. They're sitting on millions and millions, we got them there."
The bankruptcy jeopardizes the pension and health care benefits for more than 20,000 current and former employees and their families.
"We're not pushovers. We're going to stand for what's right and we're going to be there in the end," said Justice.
Another battle but a fight that’s sure to continue.
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Peabody is one of the companies the union holds responsible for Patriot Coal's bankruptcy.
That bankruptcy jeopardizes pension and health care benefits for some 20,000 people, mostly in West Virginia, Kentucky, Ohio,Illinois, and Indiana.
Current and former miners from those states rallied Tuesday at a federal building in St. Louis, then marched to Peabody headquarters and sat down in the street.
Spokesman Phil Smith says the 10 were charged with obstructing traffic.
The union says saving families' benefits may not mean much to Wall Street, but to active and retired coal miners, health benefits can mean the difference between life and death.
Patriot calls its pension and health care programs unsustainable legacies.
A judge moved Patriot's case from New York City to St. Louis in November. An $802 million financing package is allowing Patriot to continue operating while it restructures.
The UMWA posted billboard and TV ads ahead of the hearing.
U.S. Bankruptcy Judge Shelley Chapman in New York made the ruling Tuesday. Patriot is based in St. Louis.
Chapman cited hundreds of "compelling" handwritten letters from retired coal miners. Patriot is responsible for more than 10,000 retirees and 10,000 dependents, most of them in West Virginia, Indiana, Illinois, Kentucky and Ohio.
United Mine Workers of America President Cecil Roberts applauded Chapman's decision, saying "nobody has ever mined one ounce of coal in Manhattan."
An $802 million financing package was approved in August so Patriot can continue operating while it restructures.
"We did not go looking for this fight. But if a fight is what they want they came to the right place," a rally speaker said. "Now we got a bunch of corporate greedy executives in New York that want to take our healthcare and our pensions away that you worked for, that you earned and you deserve -- I say no."
The UMWA says the bankruptcy, which Patriot Coal filed in July, could take health benefits and pensions away from former and current employees.
"We're concerned about it, you know," said Joe Carter with UMWA District 17. "This affects a lot of people. There's over 12,000 retirees and there's 2,000 active workers, and actually it affects about 22,000 people."
So, they say moving the case to Charleston would provide them with better representation for those people it impacts.
Coolridge Stover worked in the coal mines for 46 years and doesn’t want to see everything he fought for taken away.
"We're old and we don't need to be messed with," Stover said. "They need to take care of us because we made them what they are. I fought to help get it, and I'll fight until I die trying to keep it."