Bankruptcy judge okays Patriot-UMWA deal

A US Bankruptcy Court judge in Missouri approved Patriot Coal’s request for permission to finalize a labor deal with the United Mine Workers of America that will offer better benefits for thousands of unionized miners and bring a months-long dispute to an end.
Bankruptcy judge okays Patriot-UMWA deal Bankruptcy judge okays Patriot-UMWA deal Bankruptcy judge okays Patriot-UMWA deal Bankruptcy judge okays Patriot-UMWA deal Bankruptcy judge okays Patriot-UMWA deal

 

Donna Schmidt

According to Bloomberg, judge Kathy Surratt-States green-lit the five-year agreement.

The deal has fewer concessions than the one she initially approved on May 29.

Among the provisions in the latest deal, which the UMWA voted on and ratified with 85% approval last Friday, are wage changes including 50 cents per hour every year from 2015 to 2018, as well as healthcare benefits similar to non-union workers.

Pension benefits have also been maintained for retirees, and active employees will continue earning pension credits.

The agreement will help Patriot save about $130 million annually over the coming four years, more than 85% of the $150 million the company said it would need to save to successfully exit its Chapter 11 bankruptcy proceedings.

“This is obviously one of the most significant, if not the most significant development in this case,” Patriot attorney Marshall Huebner reportedly told Surratt-States.

Patriot declined to make comment to ILN Tuesday, but in a statement last Friday officials said the now-finalized deal would allow it to move forward.

"Ratification of these agreements provides labor stability and ensures cost savings essential to Patriot's plan of reorganization," president and CEO Bennett Hatfield said.

“These agreements should set Patriot on a path to emerge from bankruptcy by the end of 2013.”

UMWA president Cecil Roberts said last Friday that the final settlement was a “significant improvement” over the federal bankruptcy judge’s order in May.

“This has been a difficult and uncertain year for our members,” Roberts said.

“But I believe that in the end, they understood that we had done a lot to improve what the judge had ordered. They also understood all that was at stake and resolved to move forward in a positive way.”

St Louis, Missouri-based Patriot initially filed for bankruptcy in July 2012, citing drops in coal demand as well as $1.6 billion in lifetime healthcare obligations for its retirees.

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