Patriot has proposed to establish a voluntary employees' beneficiary association - or VEBA - trust that would be administered by the UMWA or the UMWA Health and Retirement Funds.
The VEBA trust would receive funding from Patriot through a significant ownership stake in the reorganized company, which could be worth hundreds of millions of dollars, as well as profit-sharing contributions by Patriot of up to $300 million, an initial cash contribution of $15 million, and future recoveries from litigation.
In addition, Coal Act and Black Lung beneficiaries will continue to receive their current benefits with no changes whatsoever.
And, while Patriot has proposed to withdraw from the 1974 UMWA Pension Plan, that action will have no effect on current pension benefits under that plan.
Since November, we have engaged in good-faith negotiations with the UMWA to try to reach common ground. Our current proposals reflect several improvements as a result of those discussions, and we continue to work toward a consensual resolution with the UMWA.
However, as there is no assurance that we can reach a consensual agreement within a timeframe that avoids severe disruption to our business, Patriot has recently asked the bankruptcy court for relief by filing a motion to request these necessary changes without the consent of the UMWA.
The recent liquidation of Hostess Brands, following a devastating strike, demonstrates what can happen when labor concessions cannot be successfully obtained during bankruptcy. We must find a way to avoid this outcome.
Our efforts also include steps to hold Peabody Energy accountable for its actions and obligations. In March, Patriot filed a lawsuit against Peabody in an effort to ensure that Peabody will continue to fund its obligations to certain retirees in full.
We are also continuing to investigate other potential claims against Peabody and others with the support and assistance of the Unsecured Creditors' Committee and the UMWA.
While it is unfortunate that some have attempted to distort or provide misinformation about our company's goals and actions, Patriot is committed to making the changes necessary to emerge as a viable entity for the benefit of all stakeholders, while saving more than 4,000 jobs.
Failing to make any changes in UMWA employee costs and retiree medical coverage, as many uninformed critics are advocating, would simply force the company into liquidation - and that is the worst possible outcome for retirees, employees and the communities in which we operate.
Hatfield is president and chief executive officer of Patriot Coal.