Patriot Coal Wins Leave to Cut Retiree Pensions, Benefits
Patriot Coal Corp. (PCXCQ), the bankrupt mining company, won court approval of a proposal to reduce pensions and benefits to 13,000 unionized workers and retirees.
U.S. Bankruptcy Judge Kathy Surratt-States in St. Louis today approved the company’s request after a week-long hearing earlier this month in which protesters gathered outside the courthouse. The union said in a statement after her ruling that it intends to appeal in a federal court. Patriot said it won’t impose the cuts without first trying to negotiate a resolution.
Patriot has already been through 12 rounds of negotiations with the United Mine Workers of America, disputing the outlook for coal prices, the fairness of its proposal to retired miners and the possibility of recoveries from a potential lawsuit over Peabody Energy Corp (BTU)’s 2007 spinoff of Patriot.
“As it happens so much in life, a mutually satisfactory resolution was out of reach,” Surratt-States said in the ruling. She overruled objections from the unions and said that without relief from its retiree costs, the company would be forced to liquidate.
http://www.bloomberg.com/news/2013-05-29/patriot-coal-wins-approval-to-cut-retiree-pensions-benefits-1-.html?cmpid=yhoo
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U.S. Bankruptcy Judge Kathy A. Surratt-States in St. Louis today granted the company’s request to pay 274 people under two bonus plans. Patriot said the money would give managers an incentive to improve the company’s performance and stay through its Chapter 11 reorganization.
The United Mine Workers of America, which represents 42 percent of Patriot’s workforce, objected, calling the payments “massive bonuses to corporate insiders” at a time when the company is seeking concessions from regular employees and claiming it faces a liquidity crisis. The company’s top 35 officers, who make up 13 percent of the bonus-plan participants by number, will get 42 percent of one payment plan by amount and 61 percent of the other, the union said.
“The facts remain that certain key personnel perform duties that are more integral to the viability of the organization and such individuals are generally compensated at higher levels,” Surratt-States said in her opinion.
Patriot said the payments are needed to keep executives in their positions and “perform their responsibilities at the highest level possible under increasingly difficult circumstances.” Average compensation has declined 20 percent from about two years ago, the company said.
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http://www.bloomberg.com/news/2013-05-16/patriot-coal-can-pay-6-9-million-in-executive-bonuses.html
But reducing pensions and benefits to 13,000 unionized workers and retirees does not create "increasingly difficult circumstances."
