Wed Oct 24, 2012 12:58pm EDT
* Patriot Coal bankruptcy puts health care, pensions at risk
* Miners say Peabody and Arch, which spun off Patriot, should pay
By Nick Brown
Oct 24 (Reuters) - Peabody Energy Corp. and Arch Coal Inc. are being sued by mine workers who say the companies have an obligation to pay pension and health care benefits that were transferred to Patriot Coal in a 2007 spinoff.
Eight mine workers, as well as their union, the United Mine Workers of America, are seeking class action status in a lawsuit filed on Wednesday in federal court in West Virginia.
The roughly 10,000 union members whose benefits were transferred in the spinoff are worried that Patriot, in Chapter 11 bankruptcy, will try to take advantage of laws allowing bankrupt companies to cut retiree health care and pensions. In court papers related to its bankruptcy filing, Patriot said its current retiree obligations are untenable.
Spokesmen for Patriot and Arch did not immediately respond to requests for comment.
The union is determined to salvage benefits by going after Peabody and Arch, which it accuses of dumping costly obligations onto Patriot.
In an interview last week, Arthur Traynor, a lawyer for the union, told Reuters the goal "is not to get money out of Patriot."
"We're going to go back and talk to the people who are responsible, who made these gentlemen the promise of health care, and that's Peabody and Arch.
"(But) Peabody and Arch, apparently, don't want to pay that," he said.
The lawsuit is filed in West Virginia, where most of Patriot's operations are based. The union wants Patriot's bankruptcy to play out in West Virginia, saying its members would have more of a voice there.
Patriot filed for Chapter 11 in New York despite not having operations in the state. The union has asked that the case be moved to West Virginia, a request still pending in bankruptcy court in Manhattan.
The bankruptcy is In re Patriot Coal Corp, U.S. Bankruptcy Court, Southern District of New York, No. 12-12900.
The lawsuit is Howe et al v. Peabody Holding Co LLC et al, U.S. District Court, Southern District of West Virginia, case number unavailable.
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