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- Jun 8, 2004
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Judge Nixes Labor Contract in Bankruptcy
August 9, 2004 04:20 PM EDT
PIKEVILLE, Ky. - A federal bankruptcy judge ruled Monday that Horizon Natural Resources does not have to honor its union contracts, a decision that will eliminate medical coverage for thousands of coal miners, including some sick from black lung disease.
Miners had asked U.S. Bankruptcy Judge William Howard to require Horizon, the nation's fourth largest coal company, to abide by the labor contracts protecting health care and retirement benefits for 1,000 active miners and about 2,300 retirees.
Howard's order sparked an immediate outcry from the United Mine Workers of America, which had staged protests on the streets outside his courtroom in downtown Lexington.
"These workers did absolutely nothing wrong," said UMWA President Cecil Roberts, who promised to appeal. "They worked hard, did what was expected and accepted lower wages for the promise of health care, but look where that got them. They've been left high and dry. No health care and no job rights."
Miners said it was unfair that a bankruptcy judge had the authority to allow companies to shed medical costs and retiree benefits to make them more attractive to potential buyers.
Newcoal LLC, formed by New York billionaire Wilbur L. Ross and four other investors, and several other companies have expressed an interest in buying Horizon's nonunion properties. However, no one has made an offer on any of Horizon's six union operations in Illinois, Kentucky and West Virginia, said Jim Morris, Horizon's vice president for business development.
In his ruling, Howard agreed with Morris's claim that financial obligations related to union contracts and the union's retirement plan made them unattractive to potential buyers. The company's assets are scheduled to be auctioned on Aug. 17.
Matt Isner, spokesman for Horizon, did not immediately return a message seeking comment on Monday's ruling.
In the decision, Howard said his ruling could actually save jobs, albeit nonunion ones, adding that he saw no reason for employment to be affected if the mines were sold while still in operation.
Horizon, posting huge financial losses and unable to pay its creditors, filed for bankruptcy in November 2002.
The company's assets, valued at just less than $1 billion, are being sold in an attempt to satisfy about $1 billion in debts and other obligations.
August 9, 2004 04:20 PM EDT
PIKEVILLE, Ky. - A federal bankruptcy judge ruled Monday that Horizon Natural Resources does not have to honor its union contracts, a decision that will eliminate medical coverage for thousands of coal miners, including some sick from black lung disease.
Miners had asked U.S. Bankruptcy Judge William Howard to require Horizon, the nation's fourth largest coal company, to abide by the labor contracts protecting health care and retirement benefits for 1,000 active miners and about 2,300 retirees.
Howard's order sparked an immediate outcry from the United Mine Workers of America, which had staged protests on the streets outside his courtroom in downtown Lexington.
"These workers did absolutely nothing wrong," said UMWA President Cecil Roberts, who promised to appeal. "They worked hard, did what was expected and accepted lower wages for the promise of health care, but look where that got them. They've been left high and dry. No health care and no job rights."
Miners said it was unfair that a bankruptcy judge had the authority to allow companies to shed medical costs and retiree benefits to make them more attractive to potential buyers.
Newcoal LLC, formed by New York billionaire Wilbur L. Ross and four other investors, and several other companies have expressed an interest in buying Horizon's nonunion properties. However, no one has made an offer on any of Horizon's six union operations in Illinois, Kentucky and West Virginia, said Jim Morris, Horizon's vice president for business development.
In his ruling, Howard agreed with Morris's claim that financial obligations related to union contracts and the union's retirement plan made them unattractive to potential buyers. The company's assets are scheduled to be auctioned on Aug. 17.
Matt Isner, spokesman for Horizon, did not immediately return a message seeking comment on Monday's ruling.
In the decision, Howard said his ruling could actually save jobs, albeit nonunion ones, adding that he saw no reason for employment to be affected if the mines were sold while still in operation.
Horizon, posting huge financial losses and unable to pay its creditors, filed for bankruptcy in November 2002.
The company's assets, valued at just less than $1 billion, are being sold in an attempt to satisfy about $1 billion in debts and other obligations.
