{{featured_button_text}}

A federal bankruptcy judge approved Thursday Alpha Natural Resources’ request to pay 15 high-ranking executives up to $11.9 million in bonuses during 2016.

The ruling hands a victory to the bankrupt coal company, which had argued the additional pay was necessary to retain its management team, and a blow to the Department of Justice and the United Mine Workers of America. The pair opposed the bonuses, saying the Virginia-based company could ill-afford the payments at a time when it is hemorrhaging cash.

How much money the executives are paid will depend on how successful they are in meeting a series of performance thresholds, including cost cutting and efforts to boost the company’s cash position. The total bonus range is from $3.4 million to $11.9 million, depending on Alpha’s ability to meet those metrics.

U.S. Bankruptcy Judge Kevin Huennekens, in comments reported by Reuters, said it was paramount for Alpha to halt its “cash bleed.” The company lost a reported $1.5 billion in 2015.

“Cash is king,” Huennekens said.

In separate matters, Alpha’s motion to cut medical and life insurance benefits for 4,580 nonunion miners and their spouses was continued until April 12. The move would also make 6,670 active employees ineligible for retirement benefits.

The company has argued the move would save it $3 million annually and remove a $125 million obligation from its balance sheet.

Benefits were originally scheduled to be terminated on Dec. 31, but coverage has continued while the issue remains pending in court.

Neither of Alpha’s two Wyoming mines, Belle Ayr or Eagle Butte, are unionized. As of the fourth quarter of 2015, they employed a total of roughly 560 people.

A weekend snowstorm that blanketed much of the East Coast made it unclear whether opponents of the bonuses would appeal Huennekens’ ruling. The U.S. Trustees’ office in Richmond was closed Monday because of the snow.

A spokesman for the United Mine Workers of America said the union was considering an appeal. A decision would likely be made Tuesday, he said.

Government officials and union representatives had lambasted Alpha in court filings, arguing the company was looking to pay its executives more at the same time it was moving to cut retiree benefits.

Huennekens, in his ruling, granted Alpha’s request to seal the names of the 15 executives in line for a bonus.

Alpha, one of the largest coal companies in America, has not recorded a profit since 2010. The company has struggled since 2011, when it purchased Massey Energy Co. for $7.1 billion. The markets for thermal and metallurgical coal fell away in subsequent years, making the company’s debt load unsustainable. Alpha entered bankruptcy last summer with nearly $3 billion in debt.

Subscribe to Breaking News

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.

Follow energy reporter Benjamin Storrow on Twitter @bstorrow.

0
0
0
0
0

Load comments