CHARLESTON, W.Va. – CONSOL Energy has filed a petition in bankruptcy court asking a judge to change the Chapter 11 reorganization of Murray Energy to a Chapter 7 liquidation.
UMWA President Cecil Roberts said for the last 40-years CONSOL has employed miners at the five mines purchased by Murray Energy in 2013. Additionally, CONSOL Energy negotiated labor agreements for the 2,000 miners during that time.
CONSOL Energy sold McElroy, Shoemaker, Blacksville, Loveridge and the Robinson Run mining complexes to Murray Energy in 2013 for about $3 billion. As part of the sale, Murray Energy paid $800 million in cash to CONSOL Energy and assumed billions of dollars of their liabilities in retirement benefits for mine workers and mine reclamation obligations.
At the time, CONSOL Energy said the sale was made in order to focus more on the natural gas market.
Murray Energy officially took over operations at the five mine in January of 2014.
In 2016, UMWA members renegotiated contract with Murray Energy that provided concessions to prevent bankruptcy at that time.
Roberts says since 2014 the price of coal and demand fell putting Murray Energy into a financial crisis.
“The price of coal in the northern Appalachia area has dropped $8,” Roberts said,”That’s about $280 million less per year in revenue coming into Murray Energy than when they purchased these mines.”
Because of these market conditions, Murray Energy was forced to take on a large amount of debt to keep the operations going.
“As time went on and the price of coal continued to drop and the market share for coal continued to be reduced,” Roberts said,”They filed for bankruptcy in October of 2019.”
Through the entire period miners have continued to work through tough conditions, and now the COVID-19 crisis.
Roberts says allegations of mismanagement aren’t relevant to the bankruptcy filing because the new company will have a entirely different board and does not reflect the intent of CONSOL Energy’s court filing.
“I believe the intent by CONSOL is to eliminate their competition,” Roberts said,”If they eliminate their competition then the northern area will be expanded to where they will have more coal orders, they may be able to make more money.”
Roberts says for every job in coal mine five others are created to support the industry, like power plants and the steel needed in underground mining. Additionally, miners spend money in their communities at car dealerships, restaurants and stores.
“Liquidation is the worst thing that can happen in a bankruptcy,” Roberts said,”The employer goes away, the jobs go away and all the benefits to the community of that employer operating go away.”
Roberts says the bankruptcy process puts workers at an extreme disadvantage and favors the people involved in the process.
“I think it’s clearly best for the workers and for the communities that these mines operate and these 2,000 people are employed,” Roberts said,”And the thousands of people that benefit from these people having a job at Murray Energy currently, and then with the new company when reorganization is finalized.”