Consol can’t appeal Murray’s bankruptcy plan, a judge rules

Source: Pittsburgh Post Gazette

February 3, 2021


Consol Energy Inc. was dealt another blow in its campaign against the bankruptcy plan of an Ohio-based rival.

A judge ruled on Monday that Consol doesn’t have standing to appeal the plan of bankrupt miner Murray Energy Inc. It was approved in May.

Cecil-based Consol, which sold five mines to Murray Energy in 2013, has been trying to scuttle the settlement that Murray reached with its creditors and the United Mine Workers of America union, claiming that it wasn’t fair to Consol, an unsecured creditor in the bankruptcy. On Monday, the bankruptcy judge wrote that Consol wasn’t aggrieved enough by the settlement to be able to appeal it, at least not in the legal sense.

The conflict stems from that 2013 sale, a deal that transferred responsibility for paying retiree benefits due the miners who worked at those mines and their beneficiaries from the Pennsylvania company to the Ohio firm.

Those benefits are protected by the Coal Act, which says that if an employer defaults on those responsibilities, the last company that owned them — if it is still in business — would be on the hook.

Murray Energy, founded and led by firebrand Robert Murray, filed for Chapter 11 bankruptcy protection in October 2019. The company said that given coal’s declining financial prospects and the weight of the company’s debts, it could only re-emerge as a functional entity if it shed much of its liabilities, including those under the Coal Act.

In legal filings last year, Consol alleged that Murray Energy and the miners’ union colluded to dump those health care liabilities on Consol.

And just after Murray’s bankruptcy plan, which rejected those obligations, was approved, the retiree’s benefit plan sued Consol and its previous parent, now called CNX Resources Inc., in federal court in Washington D.C., asking a judge to make the two Pittsburgh area companies pay.

Consol and CNX, in defending against that lawsuit, claimed, in part, that even considering the question of their liability was premature because of its pending appeal in Murray’s bankruptcy.

The bankruptcy judge’s decision on Monday removed that line of argument. The opinion was blunt: “The bankruptcy code is not concerned with Consol’s interest in averting liability under the Coal Act,” the decision read. “Protecting health care and retirement benefits for retirees of debtors in bankruptcy is the goal.”

The question of whether Consol and CNX are responsible for these retirement payments should be resolved in the lawsuit filed by the retirement plan, the bankruptcy judge wrote.

And the retirement plan wasted no time pointing that out to the judge in its case.

Consol and CNX have argued that neither has anything to do with the beneficiaries of the retirement plan. CNX noted that it’s a natural gas company, not a coal company, and Consol noted that it was created in 2017 and therefore had nothing to do with the 2013 sale of mines to Murray. Both entities grew out of a 150-year old coal company that used to be called Consol Energy.

Written by: Anya Litvak: