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Laid-Off Employees Of Bankrupt Blackjewel Mining Seek Pay, Answers

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Blackjewel miners and family members gathered in Whitesburg, KY, to learn more about the bankruptcy. Photo: Sydney Boles, Ohio Valley ReSource

This article was originally published by Ohio Valley ReSource.

Patrick Fitchpatrick has worked at Blackjewel’s D-11 coal mine in Cumberland, Kentucky, for more than a year. He said he enjoyed the work right up until he was told not to come in last Monday. 

“Everything was smooth sailing and then one day it just all goes to hell,” he said.

The country’s sixth-largest coal company filed bankruptcy last week, and Fitchpatrick was among many of Blackjewel’s 1,100 workers across Kentucky, Virginia and West Virginia who were suddenly out of work.

Then Fitchpatrick got more bad news, this time from the bank: His paycheck bounced. Fitchpatrick said he has yet to receive some $4,200 in owed wages. The father of two just bought a house and truck. Now he’s struggling to pay his bills. 

“I’m having to sell my tools, my guns, everything that I’ve worked hard for just to make ends meet,” he said. 

More than a hundred coal miners and their family members in similar situations gathered Wednesday in Whitesburg, Kentucky, in an attempt to get some answers and some of their pay from the failed mining company. Miners from across the region are largely still waiting for back wages as well as answers about the company’s future. 

Chaotic Ten Days

The coal industry is no stranger to bankruptcy. Over the last decade, a wave of bankruptcies roiled the sector as major players including Alpha Resources, Peabody Energy and Arch Coal sought to restructure under Chapter 11 protection. 

But since its surprise filing on July 1, Blackjewel’s bankruptcy has been anything but routine. 

“Obviously I don’t think last week went the way anyone was hoping or expecting,” attorney Travis McRoberts explained in a bankruptcy court hearing Saturday. McRoberts is with the firm Squire Patton & Boggs which is representing Blackjewell LLC.

Federal bankruptcy Judge Frank Volk called the hearing to discuss problems with company paychecks. 

“It has visited as we all know a significant hardship on these employees and their families,” Volk said.

Last week, Volk approved a $5 million loan to Blackjewel to help keep it afloat on the condition the company’s CEO – Milton, West Virginia, resident and multi-millionaire Jeff Hoops – would resign. 

But McRoberts told Volk the company needs more money, a lot more. It owes tens of millions in unpaid local, state and federal taxes, mineral royalties, bills to vendors and fines for environmental and mine safety violations. 

The amount of debt leaves some industry observers aghast. 

“When you look at the list of debt, it’s just like, holy cow. You know, how do you get this far in debt?” Clark Williams-Derry said. He directs energy finance at the Sightline Institute, a Seattle-based think tank that works on environmental and economic sustainability issues. He said Blackjewel’s bankruptcy has been unusually chaotic. 

“How do you get this far behind on your payments with $100,000 in the bank and not think you’re getting close to bankruptcy?” he asked.

At the Saturday hearing, Blackjewel’s lawyers told the court that without another infusion of cash, it can’t pay its Appalachian employees. Currently, the company is only paying workers in the region once they are called back to work. And so far, few have gotten that call.

Documenting Loss

At the Wednesday information session in Whitesburg, Blackjewel employees and their families packed the Letcher County Recreation Center. 

Miner Stacy Trotter, 43, who worked at a mine in Harlan County, said he found out about the layoffs when he checked Facebook after coming home from a 17-hour shift. 

“I’m about to lose everything,” he said. “I got a sick kid and no insurance … no money to feed him.” 

Trotter said his paycheck had been taken out of his account after he had already spent some of it, leaving him with an overdraft of $3,200 in his bank account. Trotter said he doesn’t know when he might be called back to work. 

County officials and attorneys urged employees to keep paperwork documenting their hardships from the sudden layoffs and lost pay. 

“You have rights under state and federal law to receive the wages that you earned,” attorney Sam Petsonk with the public interest law firm Mountain State Justice told the crowd. Petsonk said that in addition to the missing pay, he’s concerned about the company’s required payments to employee retirement plans and health savings accounts. 

On Tuesday, lawyers representing a Wyoming employee of Blackjewel filed a class action lawsuit alleging the company failed to provide adequate notice of the layoffs under the Worker Adjustment and Retraining Notification Act of 1988, more commonly known as the WARN Act. 

“This is actually the type of case that Congress really intended the WARN Act to protect against,” said Stuart Miller, an attorney with Lankenau & Miller, LLP, who is leading the case.

“Had the employer given the 60 days notice, as the acronym indicates, it gives the employees the opportunity to seek new employment, to seek new training over a 60-day period, which would certainly mitigate the devastation that is caused by a sudden closure of a facility like this.”

Kentucky Attorney General Andy Beshear has opened an investigation into the Blackjewel bankruptcy and assigned a mediator to help employees deal with debts that resulted from bounced paychecks. Governor Matt Bevin announced that the state Labor Cabinet is also looking into the matter. 

Kentucky miner Bobby Balthis found his last Blackjewel paycheck was no good. Photo: Courtesy of Bobby Balthis

Broken Trust

Bobby Balthis was among the miners at the Whitesburg event Wednesday. He worked at Blackjewel’s Clover Lick 3 mine in Harlan County. He said he was able to cash his last paycheck but then it was “clawed back,” or made void after deposit. 

“They actually took the check that I had cashed out of my savings and then charged me $12 for the company’s check that had bounced,” Balthis said.

The Kentucky Department of Financial Institutions issued a statement Wednesday encouraging banks to help affected customers by extending loan repayment terms and waiving overdraft fees, but it comes a bit late to help Balthis.

He said he knows many who are hurting who were living from paycheck to paycheck. As a veteran of the mining business, he had put some money aside in case of a layoff.

“I’ve been doing this for 27 years and you can’t never trust the coal industry, because you don’t know one day to the next,” he said.

Blackjewel’s next bankruptcy court hearing is scheduled for Friday. The court is set to consider a series of procedural motions filed by the company. Additional financing is not currently on the agenda. 

Coal hard cash

More Unpaid Appalachian Miners Stage A Coal Train Blockade

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Miner Dalton Russell, right, and others warm themselves beside the tracks. Photo: Sydney Boles/Ohio Valley ReSource

This article was originally published by Ohio Valley ReSource.

For the second time since summer, eastern Kentucky coal miners are blockading a railroad track to protest unpaid wages. The new blockade, which was started Monday afternoon by Quest Energy miners, echoes the months-long blockade by Blackjewel coal miners over the summer and speaks to a growing discontent in Appalachian coal country.

“It’s hard to go to work between two rocks and not get paid for it,” said a miner who asked not to be identified for fear of retaliation. “There’s men that’s getting their power bills cut off and men’s children starving.” 

The two miners called on their workmates to join them. By 7 p.m. Monday evening, an additional six men had arrived. Residents living near the blockade site in Blackburn Bottom, Pike County, provided the protesters with blankets, firewood and cases of water. 

Miners and supporters block the railroad in Pike Co., Kentucky. Photo: Sydney Boles/Ohio Valley ReSource

Approximately 50 miners have reportedly not received pay since December 27, and several previous paychecks came late. 

The miner who asked to remain anonymous and his colleague, Dalton Russell, said they were inspired by the months-long railroad blockade by Blackjewel miners over the summer. In that protest, the federal Department of Labor intervened, and miners received back pay after months of delay. 

The Blackjewel protest occurred amid that company’s drawn-out and chaotic bankruptcy, adding a layer of bureaucracy to an already fraught situation. By comparison, Quest Energy’s parent company, American Resources Corporation, is not in bankruptcy, so it is likely that these miners will receive pay sooner. 

But like many coal companies, American Resources Corp. has suffered as demand for coal drops and electric utilities switch to other fuels, such as natural gas.

American Resources Corp. also owns Perry County Coal, which made news in recent months for failing to pay an additional 75 workers. Perry County Judge Executive Scott Alexander told the Ohio Valley ReSource Monday that his office is collaborating with both state and federal departments of labor over potential violations of the Fair Labor Standards Act. That’s the law the Labor Department used to intervene in the Blackjewel case. 

Quest miner Russell said he stopped going to work because he didn’t have enough money for gas, and was then fired for not showing up to work. “You gotta stand up for yourself and for the rest of the guys,” Russell said. Russell is worried about how he’ll feed his three young children. 

“I’ve been packing extra lunch and sending them to the men up there,” said the partner of the miner, who asked to remain anonymous. 

In a statement, American Resources Corp. blamed the delayed payment on a “temporary blip” in the coal market and claimed that the miners have now been paid. The miners dispute that, saying they’ve yet to see their money. 

“The team members that are frustrated and protesting are good people with good hearts,” the company said in the statement. “Given challenging markets we are focused on ensuring the longevity of the employment for all the men and women of our organization and will shortly have all this resolved and excited to continue to provide jobs in an area that has had challenges given the decline of coal usage.”

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Appalachian Lawmaker Plans To Halt Senate Action Over Coal Miners’ Benefits

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Sen. Joe Manchin, D-W.Va. Photo: AP Photo/Alex Brandon

This article was originally published by Ohio Valley ReSource.

West Virginia Democratic Sen. Joe Manchin pledged Wednesday to block all legislation until pensions and health benefits are secured for coal miners. 

Manchin said no legislation will pass the Senate until he is assured that coal miners’ benefits will be in the spending bill used to fund the federal government.

The Bipartisan American Miners Act would permanently secure pensions for about 82,000 coal miners who could lose their retirement benefits by sometime next year without congressional action.

In remarks on the Senate floor, Manchin said miners can’t wait another year for congressional action. 

“We can give them that peace of mind today and no legislative business will pass without coal miners first,” Manchin said.

Senate Majority Leader Mitch McConnell of Kentucky recently signed on as a co-sponsor to a bill with Manchin and other Ohio Valley lawmakers to shore up those benefits. McConnell had blocked earlier Senate action on miners’ pensions. For example, in 2017 McConnell introduced his own bill to provide for miners’ health benefits without dealing with pensions. McConnell did not immediately return a request for comment. 

The miner’s pension plan was weakened by a series of coal industry bankruptcies.  

Murray Energy of Ohio was the last major employer contributing to the fund before its bankruptcy declaration in October. In its bankruptcy filing, Murray reports more than $8 billion in obligations under various pension and benefit plans. 

A bankruptcy court will decide if the company can escape those obligations. Manchin said that uncertainty about pensions is a burden for miners and retirees. 

“Can you imagine being one of the coal miners trying to enjoy your holidays this year knowing you might wake up January 1st with no health care coverage and a reduction in your pensions?” he said.

The Bipartisan American Miners Act would transfer some money from interest accrued on the federal Abandoned Mine Land fund – which is used to clean up old mining sites – into the mine workers’ pension plan. It would not take money directly from the fund. 

An earlier version of this bill also included a provision to increase funding for the Black Lung Disability Trust Fund, which is sliding into billions of dollars of debt. That language is no longer in the legislation to shore up benefits for miners.

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Coal hard cash

Murray Energy’s Bankruptcy Could Bring Collapse Of Coal Miners’ Pensions

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Retired Kentucky miner Virgil Stanley at a UMWA rally for pension protections. Photo: Becca Shimmel/Ohio Valley ReSource

This article was originally published by Ohio Valley ReSource.

The recent bankruptcy of Ohio Valley coal giant Murray Energy has renewed fears about the already shaky financial foundations of the pension plan that tens of thousands of miners and their families depend upon.

The seismic collapse of yet another coal employer has lawmakers from the region renewing their push to fix the United Mine Workers pension fund, and has even raised broader concerns about pensions for a range of other trades.

Murray Energy has a substantial footprint across the region. It is also the last major employer contributing to the UMWA pension plan. In its bankruptcy filing, the company reports $2.7 billion in debt and more than $8 billion in obligations under various pension and benefit plans. More information will likely come out as the bankruptcy court takes up the matter.

Bob Murray speaking at an event in October, 2019. Photo: Sydney Boles/Ohio Valley ReSource

Bankruptcy proceedings often take months, and it’s not yet clear if the company will be relieved of its pension obligations. UMWA spokesperson Phil Smith said if recent history is any guide, that is a likely outcome.

“We don’t think any company should be able to be relieved of its responsibility to any retirees, whether they’re in the coal industry or not,” Smith said. “But it has happened in the coal industry time after time after time.”

Smith said if the bankruptcy court relieves Murray’s pension obligations, that could be another $6 billion loss for the UMWA retirement fund.

The UMWA health and retirement fund covers the benefits of retirees whose employers went out of business before 2007. The plan was already facing insolvency by 2022, largely due to the industry’s decline in production and a wave of bankruptcies. Smith said now that Murray Energy has filed for Chapter 11 protection, the fund could become insolvent by next year.

UMWA President Cecil Roberts said much of the problem lies in how bankruptcy courts treat workers’ concerns.

“Why should workers stand in line last? Why should it be beneficial to a CEO or CFO to file bankruptcy?” he said. “They ran the company into the ground, they get rich, the workers lose their health care. Sometimes they lose their job. Sometimes they lose their pensions. That needs to be dealt with.”

Murray Energy is among nearly a dozen coal companies to go bankrupt during the Trump administration, despite the repeated claims of a “coal comeback.” Some lawmakers worry that the combined impact could cause a domino effect for other multi-employer pensions across the country.

“Economic Contagion”

Insolvent plans fall to the Pension Benefit Guaranty Corporation, or PBGC, which is a federal backstop for pension plans. Lawmakers from around the Ohio Valley warn that the fund is also already at risk, and it would be in far more financial trouble if it became responsible for the UMWA plan.

Last year a bipartisan group of lawmakers served on the Joint Select Committee on Solvency of Multi-employer Pensions. The group was tasked with finding a solution to pension problems affecting a range of workers including teamsters, coal miners, ironworkers, and bakers and confectioners.

Sen. Rob Portman, an Ohio Republican on the joint committee, warned at a field hearing last year that if even one of the larger plans becomes insolvent that could put the PBGC at risk as well.

“That wave of bankruptcy has the potential to create an economic contagion effect,” Portman said. “In other words, it would spread around our economy.”

A union miner at the rally for pension protection. Photo: Aaron Payne/Ohio Valley ReSource

But despite the shared concern, the committee missed a self-imposed deadline to come up with a solution and disbanded at the end of the year.

The UMWA’s Smith said more than $1 billion goes into local economies every year from health care benefits and pensions that are paid directly to retirees. More than $130 million flows into Kentucky alone.

Simon Haeder is an assistant professor of public policy at Penn State University. He said shoring up the UMWA pension plan would have been a lot less expensive and more manageable if Congress had started to address the “inevitable” issue much earlier.

“Coal miners are one of those probably worst-case scenarios here,” he said, “because the balance between people paying into the system and people taking out of the system is so out of whack.”

Haeder said the miners’ pension problems also raise questions about whether people can rely on these pension systems in the future. He said the decline in union membership and the complex actions of bankruptcy courts have given employers an edge over the interests of workers when a business goes under.

“Bankruptcy law and bankruptcy court will certainly side with employers much more than they will side with employees,” he said.

A Legislative Fix?

Sen. Joe Manchin and other coal-area lawmakers introduced the American Miners Act to try to shore up the shaky UMWA pension. The West Virginia Democrat’s bill would transfer some money from interest accrued on the federal Abandoned Mine Land fund – which is used to clean up old mining sites – into the mine workers’ pension plan. It would not take money directly from the fund.

Manchin is attaching the American Miners Act to a spending bill that keeps the federal government running. He said most of the pension checks are for $600 a month or less and many of those are going to widows who depend on that money for basic living expenses.

“When coal companies go bankrupt coal miners benefits are at the bottom of the priority list,” Manchin said.

The bill would also restore a tax on coal used to fund the federal Black Lung Disability Trust Fund, which Congress had allowed to be reduced by half last year. Pennsylvania Democratic Sen. Bob Casey is a co-sponsor on the bill.

“I won’t stop fighting until we’ve secured the promised pensions and an extension of the Black Lung Disability Trust Fund for coal miners and their families,” Casey said. “I hope Congressional Republicans will join our mission.”

The Senate bill does not yet have a Republican co-sponsor but there is general bipartisan support for action on the miners’ pensions. In the House, two pending bills propose a similar funding method to shore up the UMWA fund. Republican Rep. David McKinley of West Virginia is the lead sponsor on one of those.

Democratic Rep. Bobby Scott of Virginia proposes a version that also addresses the health care benefits of retirees whose companies went bankrupt last year and have been or will be relieved of those obligations by a bankruptcy court. Both bills have passed out of committee.

But of course one Republican’s voice will matter most, and that is Senate Majority Leader Mitch McConnell of Kentucky.

McConnell’s Call

McConnell had previously postponed action on miners’ pensions by splitting an earlier proposal to address both retirement funds and health benefits. McConnell introduced his own version in 2017, which provided for miners’ health benefits but avoided dealing with pensions.

In an emailed statement, McConnell said he’s concerned about the insolvency issues facing a number of multi-employer pension plans, and that he supports finding a bipartisan solution for pension reform.

It’s not clear when or if the majority leader will take up the issue of coal miners’ pensions or healthcare benefits.

Sen. Joe Manchin (D-WV) and Majority Leader Sen. Mitch McConnell (R-KY). Source: U.S. Senate

The Miners Act and other similar bills have attracted criticism from fiscal conservatives such as the Heritage Foundation. Heritage calls the proposal a “bail out” that would do nothing to “fix the root of the problem” with the large pension plans.

Manchin said he will attach the American Miners Act to every vehicle possible in Congress in the hope that McConnell will agree to take action.

“And Senator McConnell I know he’s concerned about other pensions, we’re all concerned about other pensions, but this is on the front burner now,” Manchin said, adding that if the miners’ pension plan falls it will likely not fall alone. “When this happens, everything else will tumble and snowball with it.”

ReSource reporter Brittany Patterson contributed to this story.

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