« Thousand Worker March? | Main | Pro-Corporate Bankruptcy Courts »

October 24, 2004

Bankruptcy Court Kills

That will be the result of this court decision in Kentucky voiding the health care of miners working for a company owned by Horizon Natural Resources:

After 31 years, Carl Leake retired last year from the Cannelton mine near here with what he thought was a rock-solid promise of health insurance for life under his union contract. And a vital promise it was: this summer, his wife was found to have breast cancer and her treatment has cost more than $200,000.

But last month, a federal bankruptcy judge in Kentucky authorized Cannelton's owner, Horizon Natural Resources, to terminate its collective bargaining agreements with the United Mine Workers of America. And just like that, Mr. Leake's guaranteed health insurance was gone.

"I figure we could lose everything if we have to pay her bills," Mr. Leake, 61, said.

Mr. Leake is one of nearly 3,800 union coal miners and their dependents in West Virginia, Kentucky, Illinois and Indiana whose company-financed health insurance vanished with a swipe of Judge William S. Howard's pen last month. The union has pledged to cover their health insurance for six months. But beyond that, many workers are facing a future with no insurance or monthly premiums they can barely afford.

This is a classic abuse of the bankruptcy court, voiding beneifts for workers and killing union agreements, so companies can keep operating non-union.

The judge's argument for its action might seem compelling:

Judge Howard agreed. In a ruling in August, he said "unrefuted evidence" showed that Horizon's mines could not be sold as long as its expensive obligations to union retirees remained in place. He asserted that elimination of the benefits, while painful, was in the public interest because it would preserve nonunion jobs at about two dozen other mines that might have closed in a liquidation.
But the reality is that this supposed benefit for a few workers-- now doomed to low-wage, non-union jobs-- will set a precedent for worsening the lives for even more workers and retirees in the industry:
Bankruptcy experts said the Horizon case was likely to encourage other coal companies to try to shed expensive union agreements through Chapter 11 filings.
There is a political aspect to this decision. The union blames the Bush administration for blocking reform of the abusive bankruptcy system used by companies to undermine union agreements.
The case has become a campaign issue in West Virginia, with the mine workers union - which has endorsed Senator John Kerry - asserting that the Bush administration has opposed measures that would protect retiree benefits. . . A union meeting at a high school here on Thursday night underscored [the worker anger]. Most of the workers in the crowd were retired or in their 40's or 50's. The meeting, called to draw attention to the Horizon bankruptcy, turned into a raucous Democratic rally, with hundreds of union supporters stamping their feet and chanting "Kerry."
In 2000, miner worries about the Kyoto treaty helped tip West Virginia to Bush. Whether the return to worries about anti-union decisions is enough to tip West Virginia back to Kerry, it would be interesting if this year's election ended up being decided in this small bankruptcy court.

Posted by Nathan at October 24, 2004 09:50 AM