CHARLESTON, W.Va. -- Patriot Coal spent $57.7 million on "professional fees" during the 10 months between July 2012, when the company filed for Chapter 11 bankruptcy, and April 2013.
Those fees, which include payments made to lawyers and financial advisers, are listed in monthly bankruptcy statements Patriot files in the U.S. Bankruptcy Court for the Eastern District of Missouri. The company has not yet filed its monthly operating report for May.
Phil Smith, spokesman for the United Mine Workers of America, said the union has spent only a fraction of that amount on paying lawyers during its ongoing dispute with Patriot about wages and benefits for working miners and retirees.
Smith said he did not have specific figures about the union's legal expenses.
Janine Orf, Patriot's vice president of investor relations, said legal fees "are a necessary part of a major bankruptcy case, particularly one as large and complicated as Patriot's, where there are billions of dollars of assets and liabilities at issue.
"Clearly, a successful reorganization is critical to Patriot's survival and to saving 4,000 jobs. Patriot has been and will be challenged during this process by parties seeking to protect their interests, and the company must, of course, be adequately represented.
"Patriot's fees are subject to review by the parties in the case, including the court," Orf told the Gazette-Mail on Friday.
On May 29, U.S. Bankruptcy Judge Kathy A. Surratt-States ruled that Patriot could throw out current contracts it negotiated with the UMW and cut health-care benefits for workers and retirees.
The union argues that Patriot was created in 2007 to hire workers at union mines previously operated by Peabody Energy and Arch Coal. When it was created, Patriot assumed responsibility for many health-care costs for union miners already retired from Peabody and Arch.
Surratt-States also ruled that Patriot could move its health-care obligations to retired miners into a Voluntary Employee Benefit Association, or VEBA. Patriot has promised to spend $15 million to help start the VEBA.
Ken Hall, secretary-treasurer of the International Brotherhood of Teamsters, criticized the bankruptcy court for allowing Peabody and Arch to shift liabilities to their retirees to Patriot. Hall, who began his career working for Pennzoil in Lincoln County, also is president of Teamsters Local 175, based in South Charleston.
"That $15 million for VEBA is a lot less than Patriot put into paying its lawyers and financial consultants," Hall said. "If this [bankruptcy ruling] is allowed to stand, will this become the standard for other employers? How will that make anyone's health and pension benefits safe?
"The union and companies agreed in good faith to these benefits. If a company is legitimately in trouble, the union has an obligation to deal with that, but there should be a concept of shared sacrifices."
The UMW appealed Surratt-States' ruling to a U.S. District Court in Missouri on the same day she released it.
"Now is the time to turn the outrage over the bankruptcy decision into a change in bankruptcy law," Hall said. "Put those changes into legislation, like that proposed by Senator Jay Rockefeller."
Earlier this year, Rockefeller and Rep. Nick J. Rahall, both D-W.Va., introduced the Coalfield Accountability and Retired Employee Act, or the CARE Act, to protect those benefits. After the May 29 bankruptcy ruling, Rockefeller and Rahall again asked Congress to pass the CARE Act.
The pair introduced similar legislation in 2004 to "prohibit coal companies from avoiding health-care obligations to retirees, as stipulated in the 1992 Coal Act.
"Some bankruptcy judges have allowed coal companies to . . . terminate the health care of numerous retirees," Rockefeller stated on his Senate website.