UPDATE 4/29/13 @ 11:45 a.m.
ST. LOUIS (AP) -- A coal company is poised to argue to a federal bankruptcy judge that it needs to significantly cut health care and pension benefits for its union workers, who protest the move.
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."
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