Miners' benefits vanish with bankruptcy ruling

After 31 years, Carl Leake retired last year from the Cannelton mine near here with what he thought was a rock-solid promise of health insurance for life under his union contract. And a vital promise it was: this summer, his wife was found to have breast cancer and her treatment has cost more than $200,000.

But last month, a federal bankruptcy judge in Kentucky authorized Cannelton's owner, Horizon Natural Resources, to terminate its collective bargaining agreements with the United Mine Workers of America. And just like that, Mr. Leake's guaranteed health insurance was gone.

''I figure we could lose everything if we have to pay her bills,'' Mr. Leake, 61, said.

Mr. Leake is one of nearly 3,800 union coal miners and their dependents in West Virginia, Kentucky, Illinois and Indiana whose company-financed health insurance vanished with a swipe of Judge William S. Howard's pen last month. The union has pledged to cover their health insurance for six months. But beyond that, many workers are facing a future with no insurance or monthly premiums they can barely afford.

In a region where union benefits have long been the bedrock of middle-class life, Judge Howard's decision has been a shocking blow. Though similar decisions left thousands of unionized steelworkers without retiree benefits during the 1990's, the Horizon case marks the first time bankruptcy law has been used to void union contracts in the coal industry, experts said. Now, the mineworkers union is bracing for new bankruptcy filings by coal companies seeking to alter or eliminate collective bargaining agreements...

Bankruptcy experts said the Horizon case was likely to encourage other coal companies to try to shed expensive union agreements through Chapter 11 filings. Daniel Keating, a law professor and bankruptcy expert at Washington University in St. Louis, said the best way to protect retiree benefits is to require companies to provide long-term financing for benefit funds, so they will survive even if the companies fail.

''Coal is like steel,'' Professor Keating said. ''You have an industry that's not growing. You've got retirees that are increasing in numbers relative to current workers. When you look at a particular coal company's ability to make a profit, you are faced with a stark reality that as long as they have to honor retiree benefits, they probably can't make a profit.''

•	Miners' benefits vanish with bankruptcy ruling New York Times, Sunday, Oct. 24, 2004 Byline: James Dao

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