With a promise to pay miners’ back wages from the winning bidder for mines owned by Blackjewel LLC, advocates are now beginning to look at ways to prevent such a situation from ever happening again.
Meanwhile nearly 400 miners are still owed a month’s pay, and are continuing to picket and block the railroad tracks to prevent a trainload of coal they mined for Blackjewel from leaving the tipple at Cumberland. They say they will stay until they actually have seen the money they’re owed.
Meanwhile, on August 9 another Kentucky coal producer, Cambrian Coal LLC, filed for Chapter 11 bankruptcy protection and plans to auction off most of its assets next month, if it gains court approval. Cambrian employs about 700 people in three major mining operations in eastern Kentucky and Virginia.
The company is the latest in a spate of bankruptcies filed by major coal companies. Blackjewel was the sixth largest coal producer in the nation when it filed for bankruptcy July 1 and left employees holding worthless paychecks.
State Sen. Johnny Ray Turner of Drift and State Rep. Angie Hatton of Whitesburg said they plan to push a bill through the state legislature that will prefile legislation this week to revoke the permits of mining companies that fail to post a performance bond to pay employees.
The law already requires the bond to be posted by companies that are less than five years old, but the Kentucky Department of Labor has said it didn’t know that Blackjewel had never posted a bond.
Hatton said legislators want to make sure the cabinet does know in the future, because currently, “there is no mechanism for notifying them (the Labor Cabinet) when a new company is formed.”
“ Had they filed this bond, this wouldn’t have happened,” Hatton said.
The bill proposed by the two legislators would require the Energy and Environment Cabinet, which issues mining permits, to work with the Labor Cabinet to ensure it knows when a new permit is filed, and to deny or revoke permits of companies that don’t comply with the law.
“The bill also allows employees to collect attorney fees if they have to sue to get their wages,” said Turner, who will shepherd the bill through the state Senate.
There are 138 miners from Letcher County and 246 from Harlan County whose paychecks were clawed back from their bank accounts after the checks bounced July 2. The miners had received the checks June 28, and the company announced it had filed bankruptcy on July 1. Miners began what they thought would be a four-day vacation the following day.
They still haven’t received any back pay.
Last week, however, a Bankruptcy Court judge approved bids from Kopper Glo Mining to buy the Harlan County mines for $6.3 million and another $9 million in royalties, and from Contura to buy Wyoming mines for $34 million.
As part of its bid, Kopper Glo agreed to pay some of the miners’ back wages when the deal is finalized, and the rest when it begins mining. The company said in a press release last week that it does intend to reopen the mines and hire “as many miners back as possible.”
The U.S. Department of Labor also filed a brief with the court requesting that coal already mined by Blackjewel be declared a “hot product,” which would ensure that it can’t be sold until the miners are paid.
Ned Pillersdorf, an attorney for many of the miners, said it is unusual for wage earners to come out to the good in bankruptcy court, but in this case, it looks as though they may be the only creditors to receive what they’re owed.
“My guys could theoretically be prosecuted for trespassing, but they’re staying because their position is that they have an ownership interest in that coal,” Pillersdorf said. “The government filing that is defacto agreement.”
Pillersdorf said the company has about $100 million in debt and only $50 million in assets.
“It look like the miners are the only ones that stand a chance of being compensated,” he said.
Pillersdorf credited Bankruptcy Judge Frank Volk with the hope miners have now of being paid.
“He said he was going to make sure the miners were taken care of and that’s exactly what he did,” Pillersdorf said.
The deal for Kopper Glo to buy the mines is not final yet, but it has been approved by the judge.
In the Cambrian bankruptcy, court documents show the company’s president Mark Campbell says the bankruptcy is mostly due to Cambrian buying assets from other coal companies and a decline in the industry, the same reasons experts cite for Blackjewel’s troubles. Cambrian CEO Jim Booth resigned about two weeks before the bankruptcy filing.
Another company in Harlan County, JRL, has laid off 50 miners, but has not filed for bankruptcy.
— From AP, staff reports