Murray Energy bankruptcy spells woes for miner pensions, lawmakers say
CHARLESTON — With the announcement Tuesday morning by Murray Energy Corp. that the company was filing for Chapter 11 bankruptcy, congressional and state officials are concerned about being on the hook for miners’ pensions and severance tax payments.
Murray Energy and 10 subsidiaries filed bankruptcy filings in the U.S. Bankruptcy Court for the Southern District of Ohio Tuesday.
Company namesake Bob Murray will step down as president and CEO, becoming chairman of the board of Murray NewCo. Robert Moore takes the title of president and CEO of both Murray Energy and Murray NewCo.
With Tuesday’s announcement, Murray Energy — headquartered in St. Clairsville, Ohio — is the eighth coal company filing for bankruptcy in 2019. It is the largest employer of union coal miners in the U.S. More than 7,000 coal miners produce approximately 76 million tons of coal per year.
The United Mine Workers of America are watching the Murray Energy bankruptcy closely. UMWA President Cecil Roberts blamed the bankruptcy on a decline in steam coal demand due to the growth of natural gas and renewables in producing electricity. He also cited the slowdown in coal exports.
“Today’s filing by Murray Energy for Chapter 11 bankruptcy reorganization comes as no surprise. This day has been coming for some time,” Roberts said. “These factors delivered a one-two punch that an over-extended Murray Energy could not withstand.”
Roberts is concerned that Murray Energy could leave retired union miners without the pension benefits they’ve paid into.
“(Murray Energy) will seek to be relieved of its obligations to retirees, their dependents and widows,” Roberts said. “We have seen this sad act too many times before. But that does not mean we will sit idly by and let the company and the court dictate what happens to our members and our retirees.”
Members of West Virginia’s congressional delegation have also been watching the impending bankruptcy of Murray Energy with concern. Lawmakers believe that the UMWA’s 1974 Pension Plan, which covers more than 82,000 retired miners and 20,000 fully vested workers, will go insolvent by 2022 and cause the retired miners, widows, and other beneficiaries to lose health care benefits.
U.S. Sen. Joe Manchin, D-W.Va., said during a Oct. 16 press conference that a potential Murray Energy Bankruptcy could speed up that timetable, making the pension fund insolvent by 2020 and putting pressure on the federal Pension Benefit Guaranty Corporation which takes over failed pension plans. Manchin addressed the issue during a floor speech Tuesday afternoon.
“When coal companies go bankrupt, coal miners’ benefits are the bottom of the priorities list,” Manchin said. “That is why it is essential we protect the coal miners’ pensions now. Not next year, not the year after, but now. The reason for that: it’s going to be too late if we don’t do it now.”
Two bills sitting in the U.S. Senate could help shore up the UMWA pension fund. The American Miners Act, sponsored by Manchin, is sitting in committee. The Rehabilitation for Multi-employer Pensions Act was passed by the House of Representatives in July and sent to the Senate, with no action to date. Both bills would stabilize the various union pension funds.
Manchin also introduced a new bill, the Stop Looting American Pensions Act. The SLAP Act, if passed, would make workers a higher priority during bankruptcy proceedings, require companies to continue making contributions to pension and health care plans, put restrictions on executive pay, and require the sale of assets within 60 days of the bankruptcy filing.
Another bill — introduced by Rep. David McKinley, R-W.Va., and co-sponsored by Reps. Alex Mooney, R-W.Va., and Carol Miller. R-W.Va. — would provide funding to shore up miner pension funds affected by company bankruptcies and other catastrophes. The Miners Pension Protection Act passed out of committee last week with the hopes that House Speaker Nancy Pelosi, D-Calif., will put it up for a vote soon.
“Murray Energy’s announcement not only highlights the dire state of coal but the fast-approaching insolvency of the UMWA 1974 Pension Fund,” McKinley said Tuesday. “I urge Speaker Pelosi to see the urgency and gravity of the situation and bring our legislation, Miners Pension Protection Act, to the floor for a vote immediately.”