By ROGER HORTON, president
Citizens for Coal
The ruling announced earlier today by Judge Kathy Surratt-States of the U.S. Bankruptcy Court of the Eastern District of Missouri is, as UMWA President Cecil Roberts just said in a news release, “wrong, unfair and fails to fully recognize the coming wave of human suffering that will be experienced by thousands of people throughout the coalfields.”

We support the UMWA’s decision to appeal today’s ruling. We stand with the UMWA in their efforts to win a just and fair settlement for our retirees. We believe today’s decision is no different than the decision by the EPA to veto the Spruce Mine Permit years after it was approved. Both break a basic bond of trust that must be at the centerpiece of any relationship.

In the case of Spruce, the decision by EPA has had the effect of chilling investment and creating an atmosphere of uncertainty throughout the coalfields. Today’s decision does exactly the same thing – it creates an atmosphere of uncertainty across our region. The difference is this uncertainty is being felt by some of our most vulnerable – our retirees.

We understand that companies fail. We have seen the damage done to the coal industry in West Virginia by the policies being pursued by the Obama Administration and his EPA. We know that those same policies have hurt Patriot and have contributed to this issue, but we believe there are ways to address both the needs of the company and the needs of our retirees.

We also believe that any fair and just settlement must reach back and include Peabody and Arch Coal. Many of these retirees never worked a day for Patriot yet Patriot is somehow responsible for the promises made by others.

Under the terms of today’s ruling, Patriot will be allowed to cease paying for retiree health care benefits as early as July 1. Responsibility for paying benefits would be handed over to a Voluntary Employee Beneficial Association (VEBA), which will only have guaranteed funding of $15 million plus a royalty payment of $0.20 per ton of coal the company produces, which may add approximately $5 million to the VEBA per year. Current health care costs for these retirees average nearly $7 million per month.

The company has offered the UMWA a 35 percent stake in the company, which could be sold to help fund the VEBA, in the event there is a willing buyer. Since the current and future value of the company is unknown, there is no way of knowing how much money this could provide for health care benefits or when such funding would be available. The company has also proposed a profit-sharing mechanism that would not provide any additional assistance to the VEBA until 2016 and even then would not provide more than about $2 million per year, at best.

The UMWA has filed suit in Charleston, W. Va., alleging that Peabody and Arch violated the Employee Retirement Income Security Act (ERISA) by illegally dumping contractual obligations when they created Patriot and Magnum.

The UMWA’s public protests against Peabody and Arch will continue with a June 4 rally in Henderson, Ky., at 10:00 a.m. at the Henderson County courthouse. More than 4,000 people are expected at that event.

Citizens for Coal will continue to work for fairness for our Patriot coal miners. We will also continue working to build coalitions to defend our entire industry from the assault against it by Washington. We are determined to win both fights.

Roger

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