Written by Your 5News Team
Last updated on March 16, 2013 @ 1:53AM
Created on March 13, 2013 @ 7:14PM
Patriot Coal has nine mining complexes in the Mountain State, and more operations in four other states. But the company filed for Chapter 11 Bankruptcy this past summer, and now thousands of retired miners risk losing their pension and health benefits, including hundreds of people in our area. A mine union involved in the case said this is part of a bigger scheme for corporations to back away from promises they made to retires.
"It's sad when you've got to fight for what you earned," said Vietnam War veteran and retired coal miner Larry Knisell, 63, of Westover.
Knisell is one of thousands of retired coal miners caught in the middle of a bankruptcy controversy for a company he said never worked for. Now he and his family might lose the pension and health benefits he spent years working to earn.
"If they get by with this, there will be people that will absolutely positively die," Knisell said. He told us he plans to stop at nothing to get the word out about what he calls wrong doings between Patriot Coal and his former employer, Peabody Energy.
Larry Knisell spent 27 years mining coal for Peabody Energy rat the Federal No. 2 mine in Blacksville. But in 2007, Peabody sold it and nine other unionized mines in West Virginia and Kentucky in a spin-off operation that created a brand new company called Patriot Coal.
Patriot bought a company called Magnum in 2008, which had similarly been spun off from industry giant Arch Coal a few years earlier. Patriot took on Arch and Peabody's mines, current employees and more than a billion dollars worth of health care obligations to about 20,000 UMWA retirees and beneficiaries.
Peabody said Patriot was created at the height of the coal economy, and had analysts singing its praises. "It had significant assets, it had low debt levels, it had a market value that actually more than quadrupled in less than a year," said Vic Svec, Senior Vice President for Investor Relations and Corporate Communications at Peabody Energy.
But Patriot Coal filed for Chapter 11 bankruptcy in July 2012. UMWA officials said Peabody carefully orchestrated the spin-off to back down on its promises to retirees. They also said Patriot was given too many debts, not enough assets, essentially designing it to fail.
"Peabody created a company to increase their profits and took the people that created enormous wealth for them, and held up to their end of the bargain--we never varied from our end of the bargain--and just tossed us out like yesterday's garbage," said Mike Caputo, UMWA International District 31 Vice President.
Peabody told 5 News this is a matter between Patriot and the union, because all the retirees at the heart of this matter worked for companies that are now Patriot Coal. "When you sell a company, you sell with it its operations, you sell with it its assets, its liabilities, its obligations, its employees, its retirees, and a spin-off is very much that same kind of arrangement. So for more than five years, that has all been a part of Patriot Coal," Svec said.
But the retirees and their families involved said they're reminded every day of what's at stake. "The guys that earned the money, made those guys rich, hit those guys big bonuses. They don't do nothing for those people. That's what makes me sick, that's what breaks my heart," Knisell said.
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