On Monday, a bankruptcy court judge has approved Alpha Natural Resource's request to cancel labor agreements and reduce retiree benefits for unionized workers.
In court documents, Alpha writes that it is fighting to survive as the coal industry collapses. Cutting these obligations, the company argues, is necessary if it is going to restructure and get out of bankruptcy.
Here's a key part of that process: Alpha is working to sell its strongest assets which include its Powder River Basin mines as well as a natural gas company in Pennsylvania. If these benefits and labor agreements were to be passed on with those assets, Alpha believes it would make them much harder to sell.
This request was approved after negotiations stalled between the company and the United Mine Workers of America. It will affect around 4,200 retirees, dependents, and widows.
Alpha declared bankruptcy in August. In January, a bankruptcy court judge granted the company's request to pay up to $12 million in executive bonuses.
