For coal miners employed by Walter Energy Inc., Donald Trump represents hope that the future will bring them desirable jobs and benefits, according to Bankruptcy Judge Tamara O. Mitchell of Birmingham, Ala.
Judge Mitchell’s optimistic outlook is not based on any political philosophy the presidential aspirant is trumpeting in his campaign. Rather, it stems from Mr. Trump’s biography.
Acknowledging the hardships that coal miners have endured for decades, Judge Mitchell tried to give Walter Energy workers consolation with the thought that a going-concern sale to secured lenders in exchange for debt will provide some of them with jobs, albeit absent the benefits and union wages they are losing in bankruptcy.
Judge Mitchell noted that “many large businesses” have gone through bankruptcy while continuing to operate. Among the “recognized names” to survive bankruptcy, she listed “multiple companies owned and operated by Donald Trump.”
Judge Mitchell faced the same distasteful task that confronted Bankruptcy Judge Kathy Surratt-States of St. Louis, who authorized Patriot Coal Corp. to terminate union contracts and retiree health benefits. Judge Mitchell said she confronted the dilemma of “whether to shut down the mines or allow the possibility that the mining operations continue in the hopes that coal prices will rebound in time.”
Walter Energy’s workers pray that they will fare better than Patriot’s because coal prices only continued declining after Patriot’s first bankruptcy, forcing the company back into chapter 11 last year, during which time it again sold the business in a Section 363 bankruptcy sale.
The United Mine Workers objected to rejection of the union contracts and termination of retiree benefits under Sections 1113 and 1114. In a lengthy opinion on Dec. 28, Judge Mitchell concluded that Walter Energy was entitled to terminate the existing arrangements because the union had not shown good cause for rejecting the company’s last offer.
Approval of the sale of Walter Energy’s primary Alabama assets to its secured lenders in exchange for debt is set for a hearing on Jan. 6. In her opinion last week, Judge Mitchell said the company “will have no choice but to liquidate” if the sale to the lenders is not approved, because no other buyer has “expressed any interest in the Alabama coal operations.”