Patriot Coal Corporation (fka PCXCQ)

[marayatano]

CONCLUSION

Was Debtor Patriot Coal Corporation created to fail? Maybe not. Maybe. Maybe the executive team involved at Debtor Patriot Coal Corporation’s inception thought the liabilities were
manageable and thus the reality of Debtors’ bankruptcy was more attributed to unwarranted optimism about future prospects. Unions generally try to bargain for the best deal for their members, however, there is likely some responsibility to be absorbed for demanding benefits that the employer cannot realistically fund in perpetuity, particularly given the availability of sophisticated
actuarial analysts and cost trend experts. Further, Congress could have incorporated pre-funding requirements for health benefits as it did for pensions when Congress enacted ERISA, but it did not. “The legacy of unfunded retiree medical benefits was itself the result of Congressional inaction, a changing manufacturing landscape, and the benign neglect and false hopes of companies and unions alike.”

Before this Court engaged in the above application of the law, the Court posed the question: What does the Bankruptcy Code and
stare decisis require? As stated by both Debtors and the
UMWA, Debtors’ reorganization has many paths to failure. This Court’s task is limited to applying the law to the facts and evidence presented. So done. Therefore,

IT IS ORDERED THAT the Motion to Reject Collective Bargaining Agreements and to Modify Retiree Benefits Pursuant to 11 U.S.C. §§ 1113, 1114 of the Bankruptcy Code is GRANTED in that the Obligor Debtors are authorized to reject their collective bargaining agreements pursuant to Section 1113 of the Bankruptcy Code and implement the terms of the Fifth Section 1113 Proposal on June 1, 2013; and in that the Obligor Debtors are authorized to terminate retiree benefits for certain of their current retirees pursuant to Section 1114 of the Bankruptcy Code,
implement the terms of the Fifth Section 1114 Proposal and transition the retiree health care to the UMWA Retiree Healthcare Trust, which shall be structured as a Voluntary Employee Beneficiary Association, on July 1, 2013, unless the conditions proscribed are met whereby the transition date will be January 1, 2014; and
IT IS FURTHER ORDERED THAT all objections are OVERRULED