Source: WV Gazette-Mail
July 28, 2020
It was startling to read a recent report that more than $274 million has been paid to lawyers and financial advisers in just 20 of the coal industry’s 56 bankruptcies since 2012. Two hundred, seventy-four million! While that is just a blip on the balance sheets of these huge law firms and Wall Street financial houses, it would go a long way in the coalfields.
Bankrupt coal companies often pay legal fees that can run up to $1,800 per hour. I ask you: Who is worth $1,800 an hour? That’s about 58 times what a coal miner earns. I can make a good argument that what the coal miner produces is much more valuable to America than what a bankruptcy lawyer produces.
Two hundred, seventy-four million dollars! Yet, retired union coal miners had to fight down to the wire to preserve their pensions and health care. Coalfield clinics, pharmacies, therapists, hospitals and other health care providers are dealing with decreasing revenue and are struggling to stay open. Indeed, many have closed their doors, slashing health care access for everyone.
Two hundred, seventy-four million dollars! Yet, coal communities affected by bankruptcies are seeing tax revenue dry up. They cannot pay for local police forces, deputy sheriffs, firefighters, EMT’s and more. Their infrastructure is crumbling, and they do not have the resources to do anything about it.
Let’s face it, America’s bankruptcy system is a scam. It’s rigged to siphon off millions of dollars from working-class communities and send it to Wall Street. And just what is it that these lawyers and financial advisers are providing?
The American bankruptcy process is straightforward. The steps are clear and bankruptcy courts’ decisions almost always follow the same rules, no matter where that court is located:
- First, workers and retirees get nothing.
- Next, vendors get a little, but not nearly all they are owed.
- Next, the bankrupt company’s executives split up a wealth of bonuses.
- Next, the lenders get most of their money back.
- And last, a company cannot emerge from bankruptcy until it gets more loans, called exit financing, which ensures the lawyers and advisers get paid.\
That is exactly how it works. The workers and retirees get nothing and the lawyers and advisers always get paid. They have been running this scam especially hard in the coalfields lately.
No one knows better than I that the coal industry has been hit hard. The markets for traditional energy fuels, such as coal and natural gas, are depressed. The market for metallurgical coal has looked like a yo-yo the past several years; some years are good, some years are bad. Coal-fired power plants are closing at an accelerating pace. Companies sometimes have to turn to bankruptcy.
But the rules I laid out above are almost always followed by bankruptcy courts. I know that, and the companies know that. I cannot figure out why the companies need to pay $274 million for someone to explain rules they already know. But they did, and they are paying now, and more companies will be paying in the future. I do not know what value they are getting for that money.
In the meantime, the resources and funding that workers, families and communities in America’s coalfields so desperately need is sucked away, never to return. It is a con game and, in the end, we all pay for it.
Written by: UMWA International President Cecil E. Roberts