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Bankruptcy Judge Tamara O. Mitchell approved a deal to provide health care benefits to retired Walter Energy Inc. miners, Dow Jones Daily Bankruptcy Review reported today. Judge Mitchell on Friday signed off on the creation of a voluntary employees beneficiary association (VEBA) to pay the health care benefits of retired miners represented by the United Mine Workers of America, court papers show. The VEBA fills the gap left when Judge Mitchell authorized Walter to stop funding its retirees' health benefits in connection with the sale of its Alabama mines to its lenders. The lenders have agreed to contribute $25 million to the VEBA, which will be administered by the union, once the sale closes. The sale is expected to close by the end of the month.

General Motors Co. said it will issue $2 billion in new debt to help shore up its pension plan for U.S. hourly workers, Bloomberg News reported today. The senior unsecured debt includes $1.25 billion of 6.6 percent notes due in 2036 and $750 million of 6.75 percent notes due in 2046, GM said yesterday. Goldman Sachs, Citigroup and Bank of America’s Merrill Lynch are managing the offering, the automaker said. Standard & Poor’s and Fitch Ratings earlier in the day said they would rate the notes BBB-, their lowest investment grades. Moody’s put the debt at Ba1, one step below investment grade. GM said it its annual regulatory filing earlier this month that it expected to make a $2 billion discretionary contribution, funded by debt, to the U.S. hourly plan by the middle of this year. The automaker, which also has a plan for its U.S. salaried employees, said in the annual report that its U.S. pension obligations at the end of 2015 totaled $71.5 billion and were underfunded by $10.4 billion. GM’s global pension obligations were about $95 billion, with a shortfall of $21 billion.

Members of United Mine Workers of America have approved a new collective bargaining agreement with the company that plans to acquire key assets of Walter Energy Inc., the Birmingham (Ala.) Business Journal reported today. The new agreement between UMWA and Coal Acquisition Inc. represents a critical step in the bankruptcy process for Walter Energy. Coal Acquisition is comprised of Walter's senior lenders, but the company hasn't unveiled its specific plans for Walter's assets. UMWA said the agreement will provide continued employment for hundreds of miners in central Alabama, as well as the potential for about 100 more to be called back to work in the coming months. The agreement also includes $25 million in funding for retiree health benefits, allowing them to continue through 2016, when legislation to permanently fix miners’ retiree health care and pension shortfalls would be passed by Congress.

Lawmakers looking at a plan to spend $715 million over a decade rescuing Detroit’s ailing school district said on Thursday that they will not pass legislation that affects the funding in other districts across the state, the Associated Press reported on Friday. Instead, Republican and Democratic legislators are talking with Gov. Rick Snyder’s (R) administration about other funding sources, such as diverting a portion of tobacco tax revenue or the state’s settlement with tobacco companies. The Senate Government Operations Committee on Thursday held the first of a number of hearings on legislation to split the state-managed district in two this summer and gradually return control to a locally elected board. The district’s 46,000 students would attend school in a new district, while the old one would remain intact to retire $515 million in operating debt over eight to 12 years. A commission of state appointees created to review Detroit’s finances in the wake of bankruptcy would oversee the new district’s budget until the debt is repaid and other conditions are met.

Chicago’s troubled public school system yesterday had to slash the size of one of the biggest "junk" bond offerings the municipal market has seen in years and agree to pay interest costs rivaling Puerto Rico’s in order to lure investors into the deal, Reuters reported. The Chicago Board of Education managed to sell only $725 million of an originally planned $795.5 million of tax-exempt bonds, and yields on the deal topped out at 8.5 percent, a massive premium relative to higher-rated debt sold in the U.S. municipal bond market and a clear indication of investors’ view of the depths of the district’s fiscal woes. Yesterday’s sale came a week after the school system had to pull the deal in its first attempt at an offering amid worry by investors that the district could end up in bankruptcy. 

Big Wall Street banks are pushing back at an attempt by the AFL-CIO to ban an executive perk that rewards executives who leave their posts for jobs in the government, the New York Times DealBook blog reported yesterday. So-called government service golden parachutes allow bank executives heading for top government jobs to be paid their unvested stock and equity awards when they leave, rather than forfeit them as they normally would at resignation. The labor organization said yesterday that it was seeking to ban the practice at Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, Lazard and Bank of America.

Billionaire Ira Rennert has settled a lawsuit in which a U.S. government agency accused his holding company Renco Group Inc. of trying to evade $70 million of pension obligations for its bankrupt RG Steel unit, Reuters reported yesterday. In a letter filed yesterday in Manhattan federal court, lawyers for Rennert and the Pension Benefit Guaranty Corp. said that they reached an agreement in principle to end the three-year-old case. Terms were not disclosed, and the lawyers said they plan to work out a settlement agreement by Feb. 19.