By Chuck Stinnett
Posted November 28, 2012 at 3 a.m.
St. Louis-based Patriot in July filed for Chapter 11 bankruptcy protection in a U.S. Bankruptcy Court in New York, where it had created a pair of subsidiaries only weeks earlier.
The United Mine Workers of America along with the U.S. Trustee — with support of the Kentucky Department for Natural Resources, the West Virginia attorney general and four insurance companies — sought to have the case moved to West Virginia.
The UMW objected to the bankruptcy case proceeding taking place in lower Manhattan, where a union attorney had said "the financiers and the bankers" are; it sought to have the case heard in West Virginia, a major coal-mining state where there are judges who "understand," who "live near coal miners, grew up with them, worship with them and break bread with them."
"In other words," U.S. Bankruptcy Judge Shelley C. Chapman wrote, the union wanted the case moved to "what they perceive to be the home field advantage. But it is not in the interest of justice merely to swap one party's perceived home field advantage for another."
Instead, Chapman ordered the case transferred to the federal bankruptcy case in St. Louis, which she noted is home to not only Patriot's headquarters and corporate records but also to many of the approximately 11,860 retired coal miners and family members — about half of whom live in western Kentucky, southern Indiana and southern Illinois — whose pensions and health coverage could be cut through the bankruptcy reorganization.
Patriot issued the following statement: "Patriot Coal respects the Court's decision to transfer the Company's Chapter 11 proceedings to St. Louis, where Patriot is headquartered. We remain focused on using the reorganization process to ensure the company's future viability as a competitor and employer in a challenging market environment. We anticipate that the new court will become familiar with our case very quickly, and we remain committed to completing the reorganization as soon as possible and preserving the nearly 4,000 jobs at risk."
UMWA President Cecil E. Roberts applauded the judge's ruling in a statement released by the union.
"The U.S. Bankruptcy Court made the right call today when it moved the Patriot Coal case from New York to St. Louis," Roberts said. "Nobody has ever mined one ounce of coal in Manhattan. Patriot Coal executives set up two dummy corporations in New York because they wanted their case heard in a forum far from the coal fields."
"St. Louis is where Patriot Coal is headquartered," he added. "More important, it's the headquarters for Peabody Energy and Arch Coal. These two companies spun off their operations to Patriot in an attempt to run away from pension and health care obligations to thousands of miners and their survivors."
Peabody Energy has denied the union's allegation previously.
Patriot is preparing to close its surface mine and coal preparation plant in eastern Henderson County by year's end and closed its Freedom underground mine here last summer. It also operates the Highland and Dodge Hill mines in Union County as well as several mines in West Virginia.