Feb 19, 2016 by

CREDIT: AP Photo/David Goldman, File

In this Oct. 15, 2014 photo, coal miners return on a buggy after working a shift underground at the Perkins Branch Coal Mine in Cumberland, KY.

A bankrupt coal company last month unveiled a plan to pay top executives up to $11.9 million in bonuses over six months as an apparent reward for slashing benefits for workers and dodging environmental clean-up obligations during bankruptcy proceedings. The company, Alpha Natural Resources, is one of the four largest coal companies in the U.S. and filed for bankruptcy last year.

Seven executives and eight other employees who remain unnamed in court documents are eligible for the bonus if they hit certain metrics for cutting costs while protecting the company’s cash reserves. Top executives were already promised $2 million retention bonuses for staying with the company through August 2016. These bonuses are described by Alpha as incentives to ensure high-level performance, something that is apparently not covered by annual salaries. In 2014, as the company was evidently on the verge of financial collapse, Alpha paid CEO Kevin Crutchfield nearly $8 million, and former President Paul Vinning more than $4.5 billion.

The plan to dole out millions of dollars to the same executives that bankrupted the company is the latest in a series of controversial steps taken by the industry giant. Late last year, Alpha also proposed to eliminate health insurance, disability, and other benefits for mine workers. According to court documents, this move would affect more than 4,500 disabled former employees, non-union retirees, and their families.

The cuts, aimed at curtailing expenses and restructuring debt as the company looks to emerge from bankruptcy, would save Alpha about $3 million annually. They also put the company’s balance sheets ahead of its workers.

“I can’t imagine anyone trusting them,” Clarence Bishop, a maintenance manager at an Alpha mine in Wyoming for 13 years, told the Casper Star Tribune.

Alpha is not alone in its attempts to shirk its responsibility to retired and disabled mine workers. Last year, Patriot Coal Corporation — a spinoff of Peabody Energy Company’s coal assets in the Appalachian region — filed for chapter 11 protections, just 18 months after emerging from bankruptcy.

Patriot has been criticized as “designed to fail” and as a way for Peabody, the largest U.S. coal producer, to dodge its obligation to retirees and disabled workers. Patriot acquired responsibility for thousands of retired mine workers’ benefits just two years before its first chapter 11 filing. The current bankruptcy proceedings are poised to leave mine workers with none of the benefits they were promised.

“It’s rather extraordinary,” Robert Bruno, director of the University of Illinois-Chicago’s School of Employer-Labor Relations told the New Republic. “It’s just a more elaborate attempt to detach the employer from any kind of legacy obligations for their employees, a further abdication, or departure, from the post-war era’s contract in which employers bore some responsibility…Now that model of providing some level of social insurance has been torn asunder, and the burdens have been handed to the individual worker.”

Last month Arch Coal, the second largest coal producer in the U.S., also filed for bankruptcy. Similar to Alpha and Peabody, Arch also offloaded its retiree obligations to Magnum Coal, which was later acquired by Patriot.

Mine workers, while affected most egregiously, are not the only ones harmed by Alpha’s bankruptcy. In a deal struck with the state of Wyoming, the company committed to only $61 million of the $411 million in reclamation liabilities from its mining operations. This leaves $350 million in unsecured reclamation costs, and that could fall to taxpayers.

“Given that some of these debts are going to end up on the chopping block under the bankruptcy proceeding, we [could have] lost a whole $411 million, that’s really the worst possible outcome,” Sherrill Shaffer, a professor of banking and financial services at the University of Wyoming told Wyoming Public Media.

Alpha lost its legal ability to self-bond — or self-insure for the company’s own mine cleanup — in Wyoming and West Virginia last year due to inadequate resources.

As previously reported by ThinkProgress, if all four of the U.S.’s largest coal companies went under, taxpayers would be left with a $2.7 billion price tag for cleanup and reclamation of abandoned mine sites. So far two of the four have entered bankruptcy.

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