McClellan: Patriot Coal case shows how federal judges live by their own rules : News

McClellan: Patriot Coal case shows how federal judges live by their own rules : News

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A federal bankruptcy judge ruled Wednesday that Patriot Coal could ax its union contracts and slash retiree benefits as it seeks to reorganize itself.

This ruling was particularly galling to retirees who never worked for Patriot Coal Corp., which didn’t exist until 2007, when St. Louis-based Peabody Energy created it. At the time of Patriot’s creation, Peabody saddled it with millions of dollars of legacy costs, including pension and health care obligations for thousands of retired mine workers.

The company has collapsed under the weight of these costs.

St. Louisans have seen this movie before. When Monsanto “spun off” Solutia in 1997, it dumped about $1 billion of debt on the new company. That was on top of legacy costs and liability for environmental cleanup and litigation that went along with those environmental problems.
Not surprisingly, Solutia went bankrupt in 2003.

Rerun or not, this latest ruling hardly seems fair. Miners who retired long before Patriot was created are going to lose their health insurance. This insurance was promised to them. Not just verbally, either. Promised in a written contract
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note:  it is established law that companies can and do dump cost in bankrupt courts.  workers and retirees seem to be the first targets