Coal miners work for a company for many years and retire with health care benefits. This company decides to start another company that is saddled with the original company's long-term health care obligations to many retirees.
This spinoff company then acquires another spinoff company from another bigger company that did the same exact thing. Now the new spinoff company has three times as many retirees as it has active employees. More than 90 percent of the retirees have never worked for this new spinoff company.
This new company has now filed bankruptcy and is trying to strip thousands of active and retired employees, their dependents and widows of critically needed health care benefits.
Sound like a movie on HBO? It's real life. This is is exactly what Peabody Coal and Arch Coal Co. did with their spinoff companies Patriot and Magnum. Patriot bought Magnum and now is trying to forget about some 10,000 plus coal miners and their families.
Sound like a scheme? That's exactly what it sounds like.
Patriot Coal was designed to fail because it was saddled with too much debt from the word go. Peabody dumped $570 million in retiree health care liabilities onto Patriot Coal, then walked away. Arch did the same thing to Magnum Coal. Then Patriot bought Magnum. Now Patriot has filed for bankruptcy.
Big companies like Peabody and Arch shouldn't be able to shun their responsibilities in this way. Coal miners deserve a lot better.
Michael Ray Dillier