Hearing begins on Patriot's bid to cut benefits
ST. LOUIS -- A long-awaited bankruptcy hearing began Monday in which a St. Louis-based coal company insists it must significantly cut thousands of retirees' health care and pension benefits or risk liquidation -- a claim that its miners union strongly rejects.
Patriot Coal Corp.'s proposed benefits cuts have been the most contentious aspect of its bankruptcy case since it filed for Chapter 11 protection last summer, when it estimated it would have to spend $1.6 billion to cover retirees' health care costs.
The United Mine Workers of America union, after weeks of protests in states where Patriot and its former corporate parent Peabody Energy Corp. have operations, has labeled the proposed benefits cuts immoral, drastic and unfair.
The hearing could last through Friday, although U.S. Bankruptcy Judge Kathy Surratt-States may not issue a ruling immediately.
Looking to cease pension contributions, Patriot last month gave the union a proposal that would create a trust with a maximum of $300 million from future profit-sharing to fund some level of health benefits. Patriot, seeking to modify its collective bargaining agreements, also would give the union a 35 percent equity stake in the company once it emerges from bankruptcy.