CHARLESTON, W.Va. -- As bankrupt Patriot Coal announced another major management shakeup Wednesday, the United Mine Workers union filed suit to try to preserve pension and health-care benefits for 10,000 active and retired miners and their families.
Patriot said that longtime coal industry executive Ben Hatfield was taking over the company's CEO post from Irl F. Engelhardt, who had moved into the position only five months ago.
The UMW's lawsuit, meanwhile, raises the union's accusation that Peabody Energy and Arch Coal formed Patriot in an effort to get out of their obligation to fund retiree pension and health-care benefits.
"Peabody and Arch established separate spin-off companies, which have become today's Patriot Coal, with the publicly stated intention of getting rid of their obligations to the retirees who gave a lifetime of service to those companies," said union President Cecil Roberts. "The companies bragged about getting those liabilities off their balance sheets.
"And as people with long experience in the coal industry, they knew that the cyclical nature of the industry would inevitably lead to Patriot's inability to pay for those liabilities," Roberts said. "It was a company set up to fail. But under the law, that does not relieve Peabody and Arch of their obligation to these retirees, their spouses and their widows."
The class-action lawsuit in U.S. District Court in Charleston was filed on behalf of the UMW and 10 active and retired miners. Peabody and Arch, both based in St. Louis, were named as defendants.
The suit alleges that Peabody and Arch planned to transfer employees and benefit plan obligations to Patriot "for the purposes of depriving" the employees and retirees of their benefits. The suit alleges such a move is illegal under federal law.
Arch Coal did not respond to a request for comment.
Vic Svec, a spokesman for Peabody, said, "Patriot was a completely viable company when it was spun off in 2007.