NEW YORK The United Mine Workers of America (UMWA) union has rejected a settlement offer from Peabody Energy Corp. to pay benefits to retired employees of bankrupt former subsidiary Patriot Coal Corp.
The money could have been used to provide 3,100 Patriot retirees with lifetime health-care benefits comparable to those of Peabodys active corporate employees, the St. Louis-based company said.
However, UMWA president Cecil E. Roberts said Peabodys assertion that it offered to settle "all claims" with the union isnt accurate.
"(Peabody Energy is) already paying, pursuant to a court order, $20 million a year for 3,100 workers. The offer they made to us was for $10 million a year for those same 3,100," he said. "No, thank you. The people who issued that statement want us to sell somebody out, but were not doing that."
The proposed settlement would have been payable over a 15-year period and could have been used to fund the newly established Voluntary Employee Beneficiary Association to provide health-care benefits to retirees in the wake of Patriots bankruptcy, according to Vic Svec, senior vice president of global investor and corporate relations at Peabody Energy.
"The UMWA retirees who have been traveling to St. Louis to rally for health-care benefits have a right to know that a good faith settlement offer was on the table and that union leadership rejected it," Svec said Sept. 23.
Patriot Coal filed for Chapter 11 bankruptcy protection in July 2012 (amm.com, July 10, 2012. It filed a lawsuit in March this year against Peabody to ensure that it didnt use Patriots bankruptcy to escape its own health-care obligations to retired employees.
In August this year, the U.S. Bankruptcy Appellate Panel found Peabody responsible for health-care benefits it assumed at the time of its spin-off of Patriot Coal in 2007.
A version of this article was first published in AMM sister publication Steel First.