Clinton blasts Patriot Coal bankruptcy plan

Reuters News
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Posted: Oct 02, 2015 9:16 PM

By Amanda Becker

Davie, FLORIDA (Reuters) - U.S. Democratic presidential candidate Hillary Clinton said Friday that a bankruptcy plan proposed by Patriot Coal Corp. is "outrageous and must be stopped" because it diverts money intended for coal miners’ retirement benefits.

"Patriot Coal is trying to take $18 million of the $22 million put aside for retired coal miners, wives and widows and use it to pay its lawyers instead," Clinton said in a statement provided exclusively to Reuters. "Ensuring healthcare and retirement security should be the first priority in a bankruptcy proceeding, not the last."

It is the second time in two weeks that Clinton has taken aim at a company. Last week, she criticized Turing Pharmaceuticals AG for raising the price of an anti-infective drug to $750 from $13.50 per pill, sending industry stocks tumbling.

Clinton, who is running for the Democratic Party nomination for the November 2016 presidential race, was referring to workers at an Indiana mine that operated under an agreement between a Patriot subsidiary and the Aluminum Company of America.

Patriot Coal was not immediately available for comment.

According to court filings, the Patriot subsidiary operated the mine and in return Alcoa Inc reimbursed some mine worker benefits. The two companies are now terminating that agreement, with Alcoa paying Patriot $22 million.

Patriot is in the midst of auctioning off its assets and has told a U.S. bankruptcy court judge that potential buyers are unwilling to assume the obligations it has to 969 non-union workers.

Patriot has also asked the judge to reject an agreement it made with the United Mine Workers of America over benefits for unionized retirees. The union is currently negotiating with Blackhawk Mining, which won an auction for the majority of Patriot’s assets and the nonprofit Virginia Conservation Legacy Fund, which also purchased assets.

UMWA President Cecile Roberts said in early September that tentative agreements had been reached but there were still legal hurdles that needed to be cleared.

Patriot, which filed for Chapter 11 in May, said in a legal filing last week that its deals with Blackhawk and VCLF were the only way to avoid a “piecemeal, value-destroying, liquidation."

Scott Depot, West Virginia-based Patriot has suggested contributing $3 million to a benefit trust and $1 million to an official committee of retirees.

Clinton praised a bipartisan proposal in the U.S. Senate that would recalculate how government fees paid by mining companies are transferred to a multi-employer health benefit plan.

“We must honor our commitments to the coal miners who put their own health and safety at risk to help power American economic success,” Clinton said, echoing remarks she has made on the campaign trail.[http://www.reuters.com/article/2015/08/10/us-usa-election-clinton-coal-idUSKCN0QE0UY20150810]

A U.S. Bankruptcy Court in Richmond, Virginia, is set to review Patriot Coal’s restructuring plan next week.

(Reporting By Amanda Becker; additional reporting by Tom Hals; Editing by Diane Craft)