"So here we had two new companies, each with a large burden of long-term financial obligations and not a lot of production capabilities to pay for those obligations," Roberts said. "Then someone came up with the bright idea to merge these two companies into one, which created an even greater level of long-term contractual obligations."
The Journal article continues, "At the same time, Patriot was borrowing money at higher than normal interest rates to meet operational needs and other obligations. The high price of coal, over the past several years meant that Patriot could continue making enough money to meet that debt burden and could keep its stock price high.
"But when the bottom dropped out of the coal market, this house of cards -- purposely created by Peabody and Arch in an attempt to get out of their responsibilities to their retired and active UMW workers -- collapsed. And that is just what Peabody and Arch intended to happen."
Lawyers for the UMW have intervened in the Patriot bankruptcy case, and are seeking to have the case moved from Manhattan to West Virginia. They noted that Patriot's bankruptcy filing in New York is based at least in part on two New York-based subsidiaries, both of which were created only in June.
West Virginia Attorney General Darrell McGraw and the Obama administration's Justice Department have also urged that the case be moved to federal bankruptcy court in Charleston.
This week, the UMW has meetings scheduled in Charleston and in Evansville, Ind., to discuss the Patriot situation with members who work for or are retired from the company. The Charleston meeting is set for 10 a.m. Thursday at the Charleston Civic Center.
Reach Ken Ward Jr. at kw...@wvgazette.com or 304-348-1702.