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For Puerto Rican retirees living in Florida, the critical question of the long-term security of their pensions is a constant source of worry, according to a commentary in the Orlando Sentinel. On Wednesday, the House of Representatives’ Natural Resources Committee heard testimony from a cross-section of Puerto Ricans and other stakeholders as it considers amendments to PROMESA, the 2016 law that created a financial oversight board for Puerto Rico. As discussions swirl around the future of Puerto Rico’s pensions, retirees are looking to Congress to protect their much-needed income. In October, Puerto Rico’s legislature passed a resolution opposing the proposed plan of adjustment and warned they would vote down any legislation that could implement the proposed pension cuts of up to 8.5 percent as well as cuts to other essential services. But the resolution still needs to pass the Puerto Rican Senate to have any teeth to fight back against the plan to slash retiree payments.

*The views expressed in this commentary are from the author/publication cited, are meant for informative purposes only, and are not an official position of ABI.

Creditors of Barneys New York Inc. said Authentic Brands Group’s offer to buy the luxury retailer out of bankruptcy is really a “liquidation bid” that would eliminate most of the company’s 2,000 employees, WSJ Pro Bankruptcy reported. A rival bid from a group led by retail veteran Sam Ben-Avraham would keep at least five Barneys stores open, but it was neither higher nor better than Authentic Brands’ bid by the time of the bid deadline last week, lawyers for the official creditors’ committee said in court papers filed yesterday. Barneys last week decided that the bid from Ben-Avraham’s group didn’t qualify as a competing offer and canceled an auction for the retailer that would have pitted the two bidders against each other. Authentic Brands teamed up with investment firm B. Riley Financial Inc. to take the Barneys name while eliminating most of its employees and liquidating its stores through B. Riley affiliate Great American Group, the unsecured creditors’ committee also asserted. Read more. 

In related news, even some of the world’s toniest luxury-makers are speaking up on behalf of workers threatened by store closures, Bloomberg News reported. Their concern is highlighted in a court statement from a group of Barneys New York Inc. creditors, which include high-end brands like Gucci and Prada, in support of a bid that would keep more of the bankrupt retailer’s existing stores open. Preserving those outlets “would inure to the benefit of the thousands of employees — many who live paycheck to paycheck,” not to mention vendors, landlords and customers, according to the document filed Wednesday by the official committee of unsecured creditors. Concerns about workers displaced by retail bankruptcies and liquidations have gained prominence since former employees at Toys “R” Us Inc. organized to demand promised severance pay after that retailer collapsed. The group caught the attention and support of prominent lawmakers, including presidential candidates and Sens. Elizabeth Warren (D-Mass.) and Cory Booker (D-N.J.). While bankruptcy auctions typically are won by the highest bidder, the Barneys creditors argued that “societal needs — such as preservation of employee jobs — are an appropriate consideration in weighing competing offers.” Read more. 

A pension fund covering about 90,000 coal workers and their families is on the brink of insolvency while hundreds of these miners also face losing medical benefits, part of mounting financial stress on the larger safety net meant to protect sick or out-of-work miners, the Wall Street Journal reported. The United Mine Workers of America multiemployer pension plan is projected to become insolvent during its 2022 plan year if Congress doesn’t authorize using public funds to buttress it for the first time in a history tracing back more than 70 years. Murray Energy, which filed for bankruptcy yesterday, is the last major contributor to the fund. Large U.S. coal producers have used bankruptcy as a tool to survive the industry’s decade-long decline. Several companies have successfully argued in chapter 11 that they must walk away from pension and medical obligations to stay in business, keep mines open and save jobs, according to court records, testimony and interviews. Since last October, at least eight coal companies employing nearly 16,000 union and nonunion workers have filed for bankruptcy protection. The use of chapter 11 has nearly eliminated coal company contributions to the plan. During the 2018 plan year, the pension fund collected $30 million in employer contributions, dwarfing its $613.8 million in benefit payments. The fund’s assets were valued at about $2.4 billion, compared with $6.6 billion in liabilities. Read more. (Subscription required.) 

In related news, Sen. Joe Manchin (D-W.Va.) and leaders with the United Mine Workers are expressing concern about the effects of yesterday’s bankruptcy of coal giant Murray Energy, WVMetroNews.com reported. The company employs about 5,500 people, including about 2,400 active union members. Murray’s filings in bankruptcy court showed $2.7 billion in debt and more than $8 billion in actual or potential legacy obligations under various pension and benefit plans. The mine workers union said that the bankruptcy is likely to adversely affect the fragile standing of miners’ health care and pensions. Manchin echoed the concerns about how the bankruptcy would affect a national pension agreement that has been troubled for years. The senator introduced a bill called “Stop Looting American Pensions” and described it in a floor speech. “The SLAP Act ensures all workers, union and non-union, are treated fairly when a company files for bankruptcy and ends the inequities of the current system,” Manchin said on the Senate floor. Read more. 

Labor Secretary Eugene Scalia can participate in the department’s rewrite of a closely watched investment-advice rule, career government ethics attorneys said yesterday, the Wall Street Journal reported. Scalia, a former Washington lawyer, assumed the cabinet position a month ago and whether he could participate in the Labor Department’s rulemaking on financial advice was an open question. He had previously handled a legal challenge to the Obama administration’s version of the regulation, known as the fiduciary rule. Government ethics rules can prevent officials from participating in issues they were involved in while in the private sector to guard against potential conflicts of interest. The Labor Department’s career ethics attorneys determined that neither applicable ethics rules nor the Trump administration’s ethics pledge required Mr. Scalia’s recusal, Kate O’Scannlain, the department’s solicitor, said. “The new rulemaking is not a ‘particular matter involving specific parties’ and litigation related to a prior rule which the secretary handled while in private practice has ended,” she said in a statement. She said that the Office of Government Ethics concurred with the department’s analysis. At issue is an Obama-era regulation on retirement advice that a federal appeals court struck it down last year. Scalia, the son of the late Supreme Court Justice Antonin Scalia, handled the case, arguing on behalf of the financial-services industry.

The United Auto Workers union said on Friday that its members ratified a new four-year labor contract with General Motors Co., ending the strike with the No. 1 U.S. automaker after 40 days, Reuters reported. The union, which wrung higher pay and other benefits from GM as part of the deal to end the strike by about 48,000 workers, said 57 percent of the members voted to approve the deal. UAW officials and striking workers on the picket lines had said their focus in the dispute with GM was on jobs, pay equity and fairness for workers who made concessions in 2009 to help GM through its government-led bankruptcy. They also wanted to save factories in Ohio and Michigan GM had threatened to close.

For two months this summer, out-of-work miners blocked a train full of coal from shipping out of an eastern Kentucky mine, demanding weeks of unpaid wages after their employer, Blackjewel, suddenly went bankrupt. The protest started as a five-man blockade in July and grew to include dozens before it was disbanded last month. Labor activists, local politicians and the governor of Kentucky visited. Sens. Bernie Sanders (D-Vt.) and Mitch McConnell (R-Ky.) offered public support, and the U.S. Department of Labor intervened. And now, the miners have received good news, according to the New York Times. In a series of settlements made public this week in federal courts in Kentucky, Virginia and West Virginia, Blackjewel agreed to pay about 1,100 workers some $5.1 million in unpaid wages. Blackjewel was two years old and owned mines in four states, and employed over 1,000 miners in central Appalachia, when it filed for bankruptcy in July. Miners learned in the middle of an afternoon shift that Blackjewel was shutting down immediately and putting everyone out of work. The company did not file a mandatory 60-day advance warning and did not post a bond, required by Kentucky law, to cover payroll.

Two of the biggest U.S. coal mines have been sold, raising the possibility that hundreds of miners in Wyoming could return to work almost four months after the owner of the mines filed for bankruptcy protection, the Associated Press reported. Tennessee-based Contura Energy announced Monday that Blackjewel closed Friday on the sale of the Eagle Butte and Belle Ayr mines to a subsidiary of Alabama-based FM Coal. Contura, which owned the mines before selling them to Blackjewel in 2017, participated in the deal as the mines’ permit holder. Under the sale, Contura will pay about $90 million to FM Coal subsidiary Eagle Specialty Materials, which will assume about $238 million in reclamation liabilities in Wyoming and at dozens of sites in Appalachia. Contura also paid $13.5 million to settle a tax bill in Wyoming. West Virginia-based Blackjewel furloughed over 500 employees in Wyoming when it filed for bankruptcy July 1.

The tentative contract that General Motors has worked out with the United Automobile Workers union is going to raise the automaker’s cost of labor and require a significant cash outlay. But G.M. won something that it had rarely attained in the past outside of bankruptcy: the ability to close three plants economically, the New York Times reported. Now the union is likely to try to win similar monetary gains from Ford Motor and Fiat Chrysler. And those companies may find them more costly, on a relative basis, said Kristin Dziczek, vice president for industry, labor and economics at the Center for Automotive Research in Ann Arbor, Mich. G.M. workers will vote on the contract this week, with a result expected on Friday. Most union locals will hold seminars to outline the contract’s details to members, and they allow voting over two or three days. If the contract is ratified, it will end a strike that has idled 34 G.M. factories in the United States for more than a month and disrupted operations in Canada and Mexico. Analysts estimate that the walkout has cost G.M. at least $2 billion in operating profit. Under the proposed contract, the company’s 49,000 U.A.W. workers would get higher wages and bonuses, with no change in health benefits. Reducing the company’s health care costs, by shifting more to employees, was a concession that G.M. had hoped to win. In addition, G.M. pledged to invest $7.7 billion in United States factories, and to make additional investments of $1.3 billion through joint ventures. In the last contract, negotiated in 2015, G.M. made a commitment to invest $1.9 billion on top of $6.4 billion that it had announced before those talks began.

The Pension Benefit Guaranty Corp. is taking over two pension plans sponsored by Verity Health System of California, a bankrupt nonprofit that is being acquired by the KPC Group, Pensions & Investments reported. The Verity Health System Retirement Plan A is estimated to be 52 percent funded, with $306 million in underfunding, while the Verity Health System Retirement Plan B is estimated to be 74 percent funded, with $2.8 million in underfunding. Verity and 16 affiliates filed for chapter 11 protection in the U.S. Bankruptcy Court in Los Angeles on Aug. 31, 2018, after amassing more than $1 billion in bond debt in addition to the unfunded pension liability and other fiscal demands, according to court documents. KPC Group is the parent company of KPC Health, operator of seven hospitals in Southern California. KPC Group made a $610 million stalking-horse bid for St. Francis Medical Center, St. Vincent Medical Center, Seton Medical Center and several other facilities.