Retired coal miners head into the holidays still waiting for Congress to act on legislation that could make their futures more secure. Meanwhile, the money available for them in the Peabody Energy bankruptcy case continues to bleed away, million by million.
Also, a dispute among Peabody creditors is ending because of a surge in coal prices, so Peabody is now talking about a quicker resolution of the bankruptcy case.
Bloomberg, a major supplier of business news and information, issued an editorial calling on Congress to help the retirees by passing House Bill 2403, the Coal Healthcare and Pensions Protection Act, which would add new revenue to the Multiemployer Health Benefit Plan to keep it solvent for retirees of the Peabody, Patriot and Arch coal companies.
The bill and its Senate counterpart were still languishing as of press time, although health funds for 12,500 Patriot Coal pensioners are scheduled to run out Jan. 1. The money to rescue the plan would come from unused funds set aside for cleaning up abandoned mines.
STRUNG ALONG ENOUGH
Here’s what Bloomberg said:
“The politics of coal are controversial but helping retired coal miners shouldn’t be. Congress can and should take action to ensure that thousands of former coal workers continue to receive their health benefits past the end of this year, and to keep their pension benefits secure.
“…Congressional leaders want to narrow the bill by extending miners’ health benefits only and leaving pensions to be resolved later. That would be foolish – these miners have been strung along enough, and the longer the government waits to close the pensions gap, the more it will cost.”
The latest dispersal of Peabody funds in its St. Louis bankruptcy case was of $5.08 million to FTI Consulting, a financial advisor to Peabody, for its services rendered between the filing in April and Aug. 31. The court order includes another $258,268 in reimbursement for FTI’s expenses.
“The compensation requested in the application is reasonable and for actual and necessary services rendered by FTI Consulting,” wrote U.S. Bankrupcty Judge Barry Schermer in his order dated Nov. 17.
The payment follows previous decisions to pay up to $11.9 million on bonuses for six executives and another $3.24 million in bonuses to keep 42 office employees from leaving.
NO PLAN YET
So far, the company hasn’t actually submitted the bankruptcy plan that its retirees are counting on. Peabody does say that may happen soon because a dispute involving two Wall Street investment funds, Aurelius Capital Management and Elliott Management, is ending.
The Reuters news service reported that prices for coal used to generate power and make steel have risen, including in Australia, where Peabody expanded with a $5.1 billion acquisition in 2011.
“The surge means that secured lenders such as Citibank are now likely to recoup their investment, making a legal battle over how to treat long-term debt in calculating Peabody’s assets largely irrelevant,” Reuters reported.
The investment funds were trying to claim larger shares of the Peabody assets.
Svec said Peabody now expects to file its reorganization plan by mid-December and hopes to exit bankruptcy next April.
Peabody share prices have risen from 55 cents after the bankruptcy filing last April to as high as $10.69 in recent training on the OTC stock exchange.
EARNED EVERY PENNY
United Mine Workers President Cecil Roberts continued to campaign for Congress to act, saying they have more than earned the nation’s support in their dangerous work.
“These workers put their lives and their health on the line every day for 25, 35, even 45 years, providing the fuel that energized our nation and made it the most powerful country on earth,” he said.
“They earned every penny of these benefits and now, through no fault of their own, they are on the brink of losing them.”