Coal company shafts miners

[EVT1]

www.nbcnews.com/id/52049630/t/judge-coal-company-can-drop-retirement-benefits-workers/?lite&lite=obnetwork

Same old story:

The Patriot Coal bankruptcy filing voids the company's pensions for retired miners, many of whom have health problems related to their years in the mine, including black lung disease

   Heh- 'Patriot' Coal.

A lot of people have malignant tumors and black lung or cancer,” former mine worker Alana Green told Huffington Post earlier this month. “These people can’t go out and get someone to pick them up for insurance.”

Patriot Coal is actually the child of a much larger corporation: Peabody Energy. When Peabody Energy created Patriot in 2007, it transferred many of its pension and health care obligations to the smaller coal company, even though many of the workers covered by those benefits “retired before the spinoff and never worked for Patriot,” according to Reuters.

UMWA claims that Peabody did this because Patriot was “designed to fail,” in the words of a paper [PDF] on their website written by Temple University finance professor Bruce Rader. Patriot Coal, he writes, “seems to have been created to fail in the long run,” so that it could use bankruptcy to get out paying health and retirement benefits

     Ever notice the contracts the C suite makes are never 'voided'?  Probably going to get a bonus out of the deal.  Chapter 11 is a sham in this case.  But- business as usual in capitalism central.  Haven't miners been fucked around enough in this country?  They need to take these company heads- people like Blankenship et. al. and leave their ass in the bottom of one of these mines and toss in a match.

[billisonboard]

Yeah, government needs to stay out of business until a business needs to use governmental power to void their obligations.

[Deleted]

The new paradigm: open a plant in some economically-challenged community that offers tax breaks, subsidies and "incentives" to "attract investment".
 Hire only people who are over 50 (who cannot complete a 20-year minimum to qualify for a pension) or under 30.
 20 years later, have management orchestrate/contrive a bankruptcy, close the plant, leave the employees and the town high and dry.
 Then, "Sell" the machinery to a "new" company (owned by the same "investors"), ship it to another state, and start the cycle again.
 Blame the swindle on organized labor (Unions) and "oppressive government regulations".

 

[EVT1]

Sounds like something Romney would do.  Pretty devious and there is another suit in the works:

With a difficult road ahead in bankruptcy court in St. Louis, the United Mine Workers of America has brought a parallel lawsuit 500 miles away, in West Virginia, the heart of coal country.

That lawsuit is not against Patriot but instead challenges Peabody Energy Corp, which spun Patriot off in 2007, saying the former parent must pay retiree pensions and benefits if Patriot cannot

The union argues that when Peabody spun Patriot off in 2007, it knew the new company was going to fail. Parting with only about 16 percent of its assets, Peabody loaded Patriot up with nearly 60 percent of its post-employment benefit liabilities, the union alleges

Transactions like Peabody's, in which it spun off liabilities as well as assets, are not uncommon. If the union's lawsuit is successful, it could set a precedent by allowing workers to keep a company on the hook for the liabilities it tries to offload.

www.reuters.com/article/2013/05/01/us-patriot-bankruptcy-workers-insight-idUSBRE9400D420130501

As usual it is the big fish in the background causing the trouble

[Virgil Showlion]

I don't understand how this can happen.

I thought any company claiming to have a fixed-benefit pension plan had to prove to the government every year that they were contributing to a pension fund capable of paying out all pensions in full until the end of time. And this fund was untouchable to the company and untouchable to its creditors in the event of a bankruptcy.

[EVT1]

I am sure it is overly complicated but there was this mentioned:

     Since Patriot Coal pays into a multi-employer pension plan administered by the UMWA, miners union President Cecil Roberts hopes that the other employers will be motivated to put legal pressure on Patriot Coal to maintain its contributions so they won’t be stuck paying more. Under the plan proposed by Patriot, federal insurance would cover most—though not all—of Patriot's cuts to its contributions to the multi-employer pension plan, and retirees would continue to receive their full pensions, at least for the time being. However, pensions for all coal miners could take a hit when the multi-employer plan comes up for re-negotiation in 2017

Federal insurance?  The PBGC I presume- aka government overreach into the private sector   They sure don't mind using them as a bailout do they.

     UMWA faces a separate challenge with regard to health care benefits for Patriot retirees. Unlike the multi-employer pension plan, health care plans are individual to each employer, which means that unless the judge rules in the miners' favor, health care benefits will simply evaporate for all workers who retired after 1992 (under the COAL Act, the federal government covers health care for miners who retired before 1992).

And why is the federal government covering the health care of miners who had theirs destroyed working in these mines?  Another form of bailout.   *** Of course none of this would ever be an issue in a single payer system would it    Or would it?  Would the government sue the pants off a company to recoup health costs in a universal scheme where the health costs can be directly linkeed to poor safety practices or even water contamination, etc.?  Do they do that in Canada?