Here we go again
A bankrupt coal company wants to cut off benefits to its miners while at the same time giving huge bonuses to its executives. Doesn't this sound like what happened with Patriot Coal's bankruptcy last year? (I wrote about it here.) Yes, and that's exactly what's happening in the bankruptcy proceedings for Alpha Natural Resources. Jeff Nesbitt at U.S. News & World Report wrote about it last Thursday:
As coal plants are shuttered in the face of efforts to clean up the air in major urban cities, and as market forces from natural gas companies exploit that shift, the truth has emerged. In every case, coal company executives are throwing thousands of coal workers under the bus to save their own salaries and bonuses.
The latest comes from a filing from the U.S. Trustee in the bankruptcy case for Alpha Natural Resources – a Virginia coal mining company that became one of the largest in the world after it acquired Massey Energy for $7.1 billion in 2011. Last year, after suffering four years of losses, Alpha laid off 4,000 workers and closed all but 50 mines. The company filed for bankruptcy protection in August more than $4 billion in debt.
A secret list of 15 Alpha executives asked the bankruptcy court judge to allow them to give themselves nearly $12 million in salary bonuses for 2016 – while simultaneously denying about $3 million in benefits for more than a thousand retired, low-wage workers who need it for basic things like medical coverage and life insurance.
But there's more. As Nesbitt quotes the Trustee overseeing the case:
"In addition to paying these bonuses, Alpha asks this Court's permission to conceal the identity of executives taking these payments, the amount of the bonuses Alpha intends to pay each of these executives, and the compensation these executives are already receiving. In other words, Alpha seeks to conceal all of the information parties in interest would need to evaluate the propriety of the bonuses."
Writing mid-week, here is what Nesbitt thought would happen:
The truth is that the Alpha coal executives will probably win. They'll get their bonuses, and they'll continue to pay for D.C. lobbying and trade groups to run paid "war on coal" ads. Retired coal workers will lose.
Nesbitt guessed correctly. As the Lexington Herald-Leader reported on Friday:
Alpha Natural Resources can pay potential bonuses of up to $11.9 million to senior managers during its bankruptcy, a judge has ruled.
I doubt that this will be covered by the local "newspapers" -- they've demonstrated over and over again that their sympathies lie with coal management and not with the workers. As for the rest of the media, I'll leave you with Nesbitt's opening paragraph which describes how they've ignored this:
This is the real war on coal. And it is now playing out in byzantine bankruptcy court proceedings that virtually no one is covering – perhaps because it's easier to report on what coal executives are saying (and paying for in advertisements from corporate front groups in Washington) rather than the much harder work of discovering what they're actually doing.