Murray Bankruptcy FAQ’s

 MOST ASKED QUESTIONS FOR MURRAY ACTIVE AND RETIRED UMWA MEMBERS

 

What is chapter 11 bankruptcy?

A Chapter 11 bankruptcy is when a company seeks protection through a federal bankruptcy court when the company believes it cannot survive with its existing debt. The company seeks the court’s approval to reduce its debt. During the bankruptcy proceeding, the company continues to operate under the bankruptcy court’s supervision, while it tries to restructure. During restructuring companies can cancel coal sales contracts and other legally binding agreements, with permission from the court.

 

What is a 363 Sale under the bankruptcy code?

A 363 sale is when the company is put up for auction and interested parties submit bids for the assets. Murray Energy’s bankruptcy filings indicate it will sell substantially all its assets in a 363 sale.  Murray’s first lien secured lenders are owed over $1.7 billion and have submitted a credit bid for substantially all the assets. It is unlikely that another company will out bid this amount

 

When will we know if the company is going to make it out of this bankruptcy?

The average Chapter 11 bankruptcy process can last anywhere from 6-18 months. However, we have every expectation that this will last only about 7-9 months.

 

Can the bankruptcy process change the collective bargaining agreement?

Yes, a company in bankruptcy can seek to reject the collective bargaining agreement and negotiate or, upon impasse, impose new terms and conditions of employment.

 

What is the UMWA doing to fix the problems facing Murray’s active and retired employees?

The UMWA has been involved in every aspect since Murray filed its Chapter 11 bankruptcy in October of 2019, including securing a position on the unsecured creditors’ committee. This will put us in a more favorable position to provide input to the bankruptcy judge. The UMWA will fight hard to make sure that Murray honors its legal and moral commitments.

 

I am already retired how will this affect my pension?

You will see no immediate change to your benefits. The pension plan will continue to pay benefits at the current levels.

 

Will this affect active workers ability to get their pensions?

If the court allows the company to reject the contract and the 1974 Pension Plan then your pension will freeze at the level you have accrued benefits at the time the judge’s order goes into effect. Until then you will continue to accumulate pension credit.

 

Could this bankruptcy affect the 1974 Pension Plan’s ability to pay pension benefits?

No—Although Murray is the largest contributor to the 1974 Pension Plan any withdrawal from the Plan that the court allows will not adversely affect the Plan’s ability to pay your pension benefits. The UMWA recently secured passage of the Bipartisan American Miners Act of 2019, which will provide funding for your pension for decades to come.

 

Will we continue to get our retiree health care?

Yes. Murray will ask the courts to allow the company to stop paying for your health care benefits. However, even when the court allows Murray to stop paying for these benefits the Bipartisan American Miners Act of 2019 will allow your health care benefits to be picked up by the UMWA Health and Retirement Funds. No retiree will see a disruption of their benefits regardless of how the bankruptcy court rules.

 

I’m covered by the Coal Act. Are my benefits in jeopardy?

No, your benefits are guaranteed by the Coal Act. If Murray ceases paying for your Coal Act benefits as a result of the bankruptcy, your benefits will be picked up either by a related entity (if there is one) or by the UMWA 1992 Benefit Plan. In order to be covered by the Coal Act you or your spouse must have retired before October 1, 1994.

 

I’m retired but not covered by the Coal Act. What about my benefits?

Legislation is being introduced to include individuals who would otherwise have benefits from Murray should they lose benefits as a result of the bankruptcy.

 

I never worked for Murray Energy, I worked for Consol so why does this affect me?

The majority of retirees Murray provides benefits for today never worked a single day for Murray Energy. The retirees worked for subsidiaries’ of Consol Energy and were transferred to Murray as part of a 2013 stock purchase of Consolidation Coal Company by Murray Energy.

 

Will our health care be picked up by the Orphan Fund (1993 Benefit Plan) if Murray goes under?

Only the Trustees of the 1993 Benefit Plan can make this determination, based upon the rules of the Plan. However, Murray would have to be determined to be completely out of business with no assets available to pay for retiree health care for the 1993 Benefit Plan to pick them up. In addition, the Plan doesn’t have the assets available to pay benefits for this many retirees.

 

Consol currently pays for my retiree medical. Will this bankruptcy affect that?

If Consol is responsible for your retiree health care then this case doesn’t affect that obligation.

 

Has Murray stopped contributing to the UMWA Funds?

No, Murray still contributes to the Funds and will continue to do so until the judge allows them to stop.

 

What is the timeline for Murray’s bankruptcy proceeding?

Murray’s lenders have put milestones in place for the company to meet. By April 9, 2020 the company will be put up for sale and an auction shall have occurred. By April 14, 2020 Murray must file an 1113/1114 motion to terminate your collective bargaining agreement if the UMWA has not come to an agreement with the proposed modifications. By May 14, 2020 the court shall enter an order terminating the UMWA contract. These milestones could potentially move slightly but there is no guarantee that will happen.

 

I am an active worker. Should I opt out of the 1974 Pension Plan?

This is your decision but as long as the plan is functioning under the contract you will continue to accrue additional pension credit. If you opt out you will no longer accrue additional pension credit.

 

 

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    Murray Bankruptcy Question