Comment on Patriot Coal wants out of CBAs with UMW

By Paul J. Nyden CHARLESTON, W.Va. - Patriot Coal filed a motion in U.S. Bankruptcy Court in Richmond, Virginia, last week asking the judge to nullify the company's collective bargaining agreements with the United Mine Workers of America.The motion also asks for permission to change the health care benefits promised under previous contracts to retired union miners who worked for the company.Patriot is trying to sell several companies it previously bought to Blackhawk Mining, including: Heritage Coal, Eastern Associated Coal, Apogee Coal, Hobet Mining, Colony Bay Coal, Mountain View Coal, Rivers Edge Coal, Highland Mining, Pine Ridge Coal and Gateway Eagle Coal.If these companies "do not reject their [collective bargaining agreements] and modify their retiree benefits, satisfying their [debtor in possession] covenants and the conditions to closure of the Blackhawk transaction, [Patriot] will run out of cash and will be forced to liquidate in a matter of weeks," the motion states."As a result of the spin-off from Peabody and the acquisition of Magnum, the debtors [Patriot] became responsible for liabilities relating to thousands of former union employees and retirees of Peabody and Arch Coal who retired prior to the formation of Patriot."UMW officials could not be reached for a comment on Tuesday.Patriot, the motion adds, which now manages "one of the largest coal-producing enterprises in the United States" is "operating in treacherous market conditions - the price of coal having recently dropped to levels not seen in more than a decade."Patriot, the motion states, is "simultaneously facing a barrage of ever-increasing regulatory and environmental burdens.""Faced with dramatically increasing costs and decreasing revenues, [Patriot's] losses have mounted."Last year, Patriot lost nearly $165 million and would have had "to cease operations and liquidate earlier this year had they not received emergency financing to bridge them to a potential sale transaction," the motion states.Blackhawk, the only viable company bidding to purchase Patriot's mining operations, is insisting that the UMW agrees to make major concessions, or that the union contracts be canceled, before it makes the purchase.Health benefits promised to retired miners are a major issue."Blackhawk has been clear from the beginning," Patriot's bankruptcy motion states, "that under no circumstances would it agree to ...