Bankruptcy Judge Kevin R. Huennekens has ruled that Alpha Natural Resources can break its contract with the United Mine Workers union and modify its retiree health care plan, the Charleston (W.Va.) Gazette-Mail reported yesterday. Judge Huennekens granted Alpha’s motion on the UMW contract and retiree health care benefits after a hearing in Richmond on Monday. UMW President Cecil Roberts said that the union is still trying to work out some sort of deal with Alpha, but suggested UMW members might walk off the job if acceptable terms aren’t reached. “We are trying to reach an agreement with the company to resolve this issue, but if we are unable to do that we will have to examine our options,” Roberts said. Bankrupt Alpha had asked the court in March to relieve it of its contract with the mine workers and its obligation to pay UMW retiree benefits. The company said that it needs to slash costs to survive what it called “the historic collapse of the domestic coal industry,” citing “a confluence of macroeconomic headwinds, regulatory obstacles and competitive pressures” that have forced numerous bankruptcies and cost thousands of miners their jobs. Read more.
In related news, federal officials are objecting to a coal company's plan to restructure and emerge from bankruptcy, because, they say, it looks a lot more like a plan to liquidate, WyomingPublicMedia.org reported yesterday. The U.S. Trustee Program is skeptical of the reorganization plan that Alpha Natural Resources filed in March. In court documents, the U.S. Trustee writes that although the plan was presented as a reorganization, the fact that Alpha is planning to sell off its most valuable assets, including its mines in Wyoming, makes the plan look more like a liquidation. Alpha does not explain how the company will operate once it sells off these core assets, and the U.S. Trustee says that there is no information about how the company that remains will generate income. Read more.
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