Judge sides with Patriot Coal, says bankrupt company can cut benefits of workers and retirees

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More than 23,000 coal miners and their families will lose all their health care benefits under a Wednesday ruling by a U.S. bankruptcy judge in the case of Patriot Coal. The company had asked the court to void its contract with the United Mine Workers of America, allowing Patriot to cut employee and retiree health care benefits, a move the company said would help it reorganize its finances.

The ruling allows Patriot to void collective bargaining agreements with the union, terminate benefits for certain retirees and implement terms of its most recent proposals to the union, reports Greta Weiderman for the St. Louis Business Journal: "Patriot’s most recent offer to the UMWA includes a 35 percent equity stake in the reorganized coal company, profit sharing contributions up to a maximum of $300 million, and future proceeds from litigation and royalty payments going to a Voluntary Employee Beneficiary Association Trust."

The UMWA plans to appeal the decision, reports Paul Nyden for The Charleston Gazette. UMWA President Cecil Roberts said, "As often happens under American bankruptcy law, the short-term interests of the company are valued more than the dedication and sacrifice of the workers, who actually produce the profits that make a company successful."

Bennett Hatfield, president and chief executive officer of Patriot, said the company will continue operating under current UMWA contracts in the immediate future, reports Nyden. Patriot could stop paying retiree health care benefits as early as July 1, but Hatfield said, "We continue to believe that a consensual resolution is the best possible outcome for all parties." (Read more)