The nearly two-month blockade of a Kentucky railroad track is coming to an end as unpaid coal miners end their protest in order to take new jobs, start classes, or move away from their coal-dependent communities.
When coal company Blackjewel abruptly declared bankruptcy in July, it left some 1100 Appalachian coal miners in Kentucky, Virginia, and West Virginia without pay. On July 29, five miners blockaded a train full of coal preparing to leave a Blackjewel facility in Harlan County, Kentucky. The miners’ rallying cry was “No Pay, No Coal.”
But after 59 days on the tracks, the protest is coming to an end.
Felicia Cress is married to a former Blackjewel miner, and has been at the protest since the first day.
“This happened because we got shafted, which happens all the time,” Cress said. “You got these rich people that s*** on these poor people, and people just overlook it.”
She said even though her family has to move on, the relationships forged through the protest will stay with her.
“It was a bad situation that made us come together, stay there day and night, through the rain, through the blazing sun,” she said. “We have now friendships, you know, we have a bond.”
Felicia’s husband is currently looking for work. She said her bank has threatened to foreclose on her home unless she finds money for her mortgage payment by Saturday.
Hundreds of Blackjewel miners in Kentucky and Virginia have still not been paid. But the protesters can claim some important victories.
West Virginia miners received owed wages earlier this month. The protest drew international attention, helped win miners a portion of their back pay, and highlighted the state’s failure to collect bond payments from companies like Blackjewel, as the law requires.
The train load of coal the miners blocked will remain where it is until a ruling from a West Virginia bankruptcy judge. That ruling is expected in October.
Blackjewel coal miners will have to wait at least another day to learn if the sale of the bankrupt coal company’s mines and equipment will deliver their overdue paychecks.
The U.S. Bankruptcy Court for the Southern District of West Virginia recessed Monday after an all-day hearing that yielded few results. The court is scheduled to resume the hearing Tuesday at 9 a.m.
Presiding Judge Frank Volk approved six bids, however the three main sale proposals for Blackjewel mines in Kentucky, Virginia, West Virginia, and Wyoming remain in limbo.
The approved bids included the sale of two idled metallurgical coal mines in Virginia and a coal load-out and preparation plant in Harlan County, Kentucky, among others.
More than four dozen miners and their supporters traveled from a Kentucky railroad blockade to the West Virginia courtroom. The miners stood quietly in the courtroom in lime green t-shirts that read “Harlan County Strong” and “Pay Miners First and Lawyers Last.” Others at the protest site in Cumberland, Kentucky, listened via conference call to the bankruptcy hearing.
Credit Courtesty Ned Pillersdorf
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An attorney briefs miners attending the Blackjewel bankruptcy hearing.
“I commend members of the mining profession who joined us this morning and now,” Judge Volk told the court after it returned for the afternoon. “You can make a very powerful statement without saying anything at all.”
Blackjewel owes about $11.8 million dollars in wages and benefits to more than 1,000 Appalachian coal miners who have gone more than a month without pay.
“We wanted some clarity, try to find out if there was a chance of us getting the money that we earned and possibly go back to work,” said former Blackjewel coal preparation plant foreman Derrick Saylor.
Objections Galore
Monday’s sales hearing shared the often chaotic and tense tenor that has characterized much of Blackjewel’s bankruptcy proceedings.
The judge declined to rule on a motion filed Monday morning from the U.S. Department of Labor that sought to keep Blackjewel coal in Harlan County until miners had been paid. The agency argued that transporting coal mined by employees who have not yet been paid for that work violates the Fair Labor Standards Act.
Stephen Lerner, an attorney with Squire Patton Boggs representing Blackjewel, argued the majority of the coal had already been purchased by another party, Blackjewel Marketing and Sales Holdings LLC, and therefore the issue was moot.
Three coal equipment companies also voiced objections to the way Blackjewel is proposing to sell bulldozers and other coal mining equipment.
Credit Sydney Boles / Ohio Valley ReSource
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Ohio Valley ReSource
Miners and supporters at the Kentucky protest site listen to the bankruptcy court hearing.
An attorney for Caterpillar told the court it is owed more than $26 million for equipment located in Appalachia. He expressed concern there may not be enough to pay that debt after sales are completed.
Similarly, several surety bond representatives told the court all cash earned through the sales should be set aside and not spent until a full accounting of Blackjewel’s debts, including millions in environmental reclamation obligations, is made available by the company.
Miners left unpaid by the bankrupt Blackjewel coal company say they are prepared to keep up their protest on railroad tracks in Harlan County, Kentucky, where they are blocking delivery of a load of coal. As their protest grows and gains attention, a bankruptcy court hearing on Monday could determine whether and when the miners get their paychecks.
The blockade began simply enough Monday when five out-of-work miners organized via social media to block a coal train leaving one of the Blackjewel facilities.
“If they can move that train, they can get us our money,” miner Shane Smith said.
Credit Curren Sheldon
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Miners and supporters hold a meeting along the railroad tracks.
The group grew to nine. Police asked them to clear the tracks but the miners simply moved to a different location and stood their ground. They scrawled a simple message of protest on the cardboard from a pizza box:
“No Pay, We Stay.”
Credit Sydney Boles / Ohio Valley ReSource
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Ohio Valley ReSource
A supporter with a protest sign made from a pizza box.
They played cornhole, the beanbag toss game, on the tracks. More miners and supporters showed up, and donations poured in: food, bottled water, portable toilets, a generator and lights (for more games of cornhole in the night).
The protest has since grown to dozens of miners and supporters, attracted national media attention, and has become a required pilgrimage site for campaigning politicians.
“It’s a little bit of a good feeling of accomplishment but we still ain’t done,” said miner Bobby Sexton. “We’re gonna stay here until we get some answers.”
But the miners are not the only ones looking for answers – and money – from what was the country’s sixth-largest coal mining company. A federal bankruptcy judge will decide who gets their money, and when.
Credit Curren Sheldon
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An aerial shot of the encampment that has grown up around the protest site.
Growing Protest
Blackjewel workers have gone without pay since the end of June, when, miners said, paychecks bounced without warning amid a chaotic bankruptcy filing. Backjewel owes more than $11 million in unpaid wages and taxes to roughly 1,100 workers in Kentucky, Virginia, and West Virginia.
But the company also owes tens of millions of dollars in business debts, taxes, mining royalties, and fines for mine safety and land reclamation violations.
During the course of the bankruptcy, federal Judge Frank Volk has expressed sympathy for Blackjewel employees, but has not yet forced the company creditors to pay them.
“The court is concerned about the employees,” Volk said during a July 19 hearing. “Where do they fall in the scheme in respect to recoveries in this case?”
That may become more clear Monday when Volk presides over a sale hearing. Blackjewel’s assets hit the auction block Thursday, Aug. 1. The closed-door process continued Friday.
Looming Decision
Sam Petsonk, an attorney with West Virginia’s Mountain State Justice, is representing miners from Backjewel’s eastern division. He said whether or not miners get paid depends on how much money comes from the sale of Blackjewel’s assets.
“What we need to see out of the auction is adequate proceeds to cover the obligations to the employees who are not returning to work,” he said.
Employee wage claims generally do have some priority in bankruptcy cases, but come below “secured” claims and obligations to the government such as mine reclamation costs, Petsonk said.
He is hopeful unpaid Kentucky miners may be near the top of the list of creditors due to a state law that requires some Kentucky employers to post a performance bond covering wages. Blackjewel didn’t comply with that law.
Credit Curren Sheldon
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Protesting Blackjewel miners in Harlan Co., KY
Kentucky Attorney General Andy Beshear has criticized his political rival, Gov. Matt Bevin, for the failure to make Blackjewel secure a bond. Beshear is the Democratic candidate challenging Bevin’s re-election this year.
On Friday Beshear called on Bevin to fire his Labor Cabinet Secretary over the matter.
“His job is to look out for our workers, but he failed to secure the bond from Blackjewel that could have paid the coal miners in Harlan County,” Beshear said at an event in Paducah, Kentucky.
Petsonk said if the proceeds of the sale are not sufficient to pay miners, it could then come from liquidating the company’s remaining assets.
If that isn’t enough, he said, “then we have to look to the we have to look to the liquidation process or to the non-debtor entities like Jeff Hoops personally.”
Hoops is the former Blackjewel CEO who was forced out early in the bankruptcy, when creditors demanded he step down. Hoops is well-known for his philanthropy in the area and is building a resort hotel near his home in Milton, West Virginia. He also has a separate coal entity, Lexington Coal Company.
Reached by phone Tuesday, Hoops said he’s also frustrated by the situation with the unpaid miners.
“I’m as frustrated as they are,” he said. “I no longer work for Blackjewel, I resigned more than a month ago so I have no idea what’s going on there. I’m really sorry that it’s reached this point.”
‘A Real Mess’
Hoops has been the focus of ire for many of the protesting miners, and his name shows up in some unflattering T-shirt slogans. Some industry observers say the company’s management under Hoops’ leadership set the stage for the chaotic bankruptcy and its aftermath.
“Let’s be clear about this,” said Clark Williams-Derry, director of energy finance at the Sightline Institute, a Seattle-based think tank. “Blackjewel was a company that suffered from terrible financial management, just terrible.”
He said the company wasn’t setting aside enough money to pay wages or make its employee retirement plan contributions. And Blackjewel amassed huge debts in back taxes to the federal government and to state and local governments.
“It’s just a mess, just a real mess,” Williams-Derry said.
Credit Curren Sheldon
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Near the scene of the miners’ protest in Harlan Co., KY.
He said that is what makes this coal company bankruptcy so much more disruptive than the many others that have roiled the mining industry in recent years. It also complicates the sale of assets in order to recover debts, pay miners, and continue with work at some of the mines.
“Some of these mines are probably just not profitable,” Williams-Derry said, especially those carrying large debts for mine land reclamation. “There may simply be no buyer who’s willing to take on some of these mines and pick up the cost of cleanup.”
The miners in Harlan County say many plan to attend the court hearing Monday to make sure their voices are heard.
