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news Bankruptcy Judge Allows Patriot to Abandon Union Contracts UMWA retirees rally in St. Louis prior to the Patriot decision. (Photo courtesy of the UMWA) On May 29, a federal bankruptcy judge in St. Louis ruled in favor of officials at Patriot Coal seeking to annul union contracts, a move allowing the financially distressed company to impose sharp wage and benefit concessions on current and retired miners. In a 102-page decision, Judge Kathy A. Surratt-States of the U.S. Bankruptcy Court granted Patriot's motion to reject collective bargaining agreements with the United Mine Workers of America (UMWA) while terminating current benefits for retirees. Patriot had asserted reorganization would be impossible without the cuts—a claim the union fought in court and with frequent, sometimes boisterous, public protests. Citing union requirements and "without relief from debtors' current retiree benefit costs, debtors will be forced into liquidation," Surratt-States wrote of a case "plagued with uncertainty," after a week's worth of hearings. The ruling was a major blow to the union, which represents about 40% of Patriot's miners. UMWA President Cecil Roberts ± B R E A K I N G Quest Energy Commences Production at Samuel Coal Samuel Coal Co., a subsidiary of Quest Energy, has received final approval to commence initial production at its Mine No. 1. Located in Knott County, Kentucky, Samuel Coal is a coal mining complex comprised of a series of metallurgical blend and PCI quality coal seams. Mine No. 1 is an underground greenfield mining operation in the Lower Elkhorn coal seam (also referred to as the Pond Creek seam). With a coal reserve in excess of 6 million in-place tons of N E W S Patriot Bankruptcy Standoff with UMWA Continues Patriot Coal and the United Mine Workers of America (UMWA) continued their public fight over bankruptcy restructuring as of press time, with company officials citing a need for financial solvency versus union members insisting Patriot is neglecting health care and other financial considerations for their members and retirees. UMWA President Cecil E. Roberts sounded "disappointment" with the situation, while alleging a Patriot walkout. "We made progress toward a workable alternative," he said in a release. "The union agreed to savings—but that still wasn't enough." Patriot contested the release's accuracy and denied leaving the talks. Company spokesmen 6 www.coalage.com described the outcome as wrong and unfair. "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," Roberts said. He said the union would appeal it in federal court. Patriot Coal CEO Ben Hatfield, however, hailed the decision. "This ruling represents a major step forward, allowing our company to achieve savings critical to reorganization and preservation of more than 4,000 jobs," he said in a statement. "The savings contemplated, together with other cost reductions across our company, will put Patriot on course to a viable business." Peabody Energy spun Patriot off in 2007. The court also addressed Patriot's request to modify its agreement with Peabody regarding retiree benefits. In its order, the court fully agreed with Peabody's contractual position. Accordingly, Patriot may now cease contributions to a union pension plan on behalf of unionized workers, while reducing overtime pay, planned wage increases and vacation time, among other concessions. In addition, Patriot may terminate current retiree benefits while transferring them to a trust as of Q1 2014, financed by up to $300 million in future profit-sharing contributions. Patriot had also proposed giving UMWA a 35% stake in the restructured company, which the union could sell any time and funnel the proceeds into the retiree trust. Hatfield said Patriot management would pursue "diligent" negotiations with UMWA reps to address concerns as "a consensual resolution is the best possible outcome for all parties." added they only learned meetings slated for next week were canceled via the statement. On May 29, a St. Louis federal bankruptcy judge ruled in favor of Patriot Coal officials seeking to annul union contracts, a move allowing the financially strapped company to impose steep wage and benefit concessions on current and retired miners. In her 102-page decision, Judge Kathy A. SurrattStates of the U.S. Bankruptcy Court granted Patriot's motion to reject collective bargaining agreements with the UMWA while terminating current retiree benefits. Patriot asserted reorganization would be impossible without the cuts—a claim the union fought bitterly in court and with frequent, sometimes boisterous, public protests. June 2013