Mine Workers Win Settlement of Retiree Health Care From Patriot, Peabody

QUANTICO, Va.—The Mine Workers have won a $400 million settlement from Patriot Coal Co., and its predecessor for the retirees involved, Peabody Coal, to cover the retirees’ and their families’ health care costs, the union said on Oct. 10.

The U.S. bankruptcy judge in St. Louis who is hearing the Patriot bankruptcy reorganization must still approve the settlement,  It will bring the tens of thousands of workers and retirees their health care coverage, which Patriot had cut off.

The settlement will also end the Mine Workers’ monthly demonstrations against the two firms.  And UMW will give up its 35% stake in Patriot, which the union got earlier this year in bankruptcy court.  A bankruptcy court hearing on it is scheduled Nov. 6.

But the settlement still does not solve the permanent problem in bankruptcy law: That workers come last, after banks and other creditors, when a firm goes broke.  And Mine Workers President Cecil Roberts said UMW would continue to push for federal legislation for a permanent solution to the Patriot retirees’ health care costs.

“I am very pleased we have been able to reach this agreement with Peabody and Patriot,” Roberts said in a statement.  “This is a significant amount of money that will help maintain health care for thousands of retirees who earned those benefits through years of labor in America’s coal mines.  This will also help Patriot emerge from bankruptcy and continue to provide jobs for our members and thousands of others in West Virginia and Kentucky.”

UMW said $310 million of the settlement will come from Peabody over the next four years, starting with $90 million next year.  Patriot, which Peabody created several years ago – to receive the retirees and their health care costs that Peabody dumped – will contribute up to $90 million, including $15 million in royalties from future coal mining.

The retirees will get the money from the two firms via the Patriot Voluntary Employee Beneficiary Association (VEBA), which Patriot established, and the bankruptcy judge OKd, to administer retiree health benefits after Patriot filed for bankruptcy in mid-2012 and dumped the retirees’ health care at the end of July, 2013.

Still not covered, so far, are retirees from Arch Coal Co., which also dumped its former workers and their dependents onto Patriot before Patriot went bust.  “Arch still can step up and meet its obligation to these retirees. We will continue to encourage them to do so in the coming days,”  Roberts said.

– PAI