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Westmoreland Coal asks bankruptcy judge permission to pay bonuses for top managers

BILLINGS- Westmoreland Coal, the owner of three coal mines in Montana and one in Wyoming, is asking a federal bankruptcy judge for permission to pay bonuses to 243 of its top managers.

In a filing this week, Englewood, Colo.-based Westmoreland said the bonuses would total $1.5 million per quarter as the bankruptcy proceeds and average $6,000 per employee.

In making its case, Westmoreland said it cannot afford to risk losing the valued employees, whose continued employment is crucial to ongoing restructuring efforts.

Westmoreland, one of the nation’s oldest coal companies, owns the Rosebud Mine at Colstrip along with the Savage and Abasloka Mines in Montana and the Kemmerer Mine in Wyoming. The company has a total of 1,743 employees.

The company filed for Chapter 11 bankruptcy protection Oct. 9 in Houston as it attempts to restructure more than $1.4 billion of debt. Westmoreland shares traded at 7 cents at market close Thursday.

Environmental groups and union miners are crying foul over the proposed bonuses.

Mike Scott of the Sierra Club’s Beyond Coal Campaign says the bonuses won’t go to those who need it the most.

“It doesn’t appear that any of these bonuses are going to miners. It seems to us those are the people who really need to be supported right now as coal in general is facing a steep decline in its market. Really what Westmoreland is doing right now is wrong,” said Scott, who is based in Billings.

Scott also said the uncertainty surrounding Westmoreland’s future also poses a challenge to groups trying to keep tabs on the company’s plans and commitments.

“In this restructuring, it appears they are talking about just liquidating, so we don’t even know who’s going to own this mine in a couple of months.  That makes it really hard to deal with things like new permitting and expansion at the mine, because it’s hard to say who’s going to be in charge of implementing what they propose,” he said.

The International Union of Operating Engineers,  which represents approximately 300 miners at Colstrip, told Q2 News it’s keeping a close eye on the company’s bankruptcy but has not decided if it will try to intervene.

Montana IUOE Business Manager Steve Gross said union members at Colstrip voted earlier this month to extend their current contract with Westmoreland through March of next year, in hopes that many of the questions about the company’s future will be decided by then.

In Wyoming,  the United Mine Workers, which represents union workers at the company’s Kemmerer Mine, has intervened in the bankruptcy raising concerns that Westmoreland is using its bankruptcy to cut health care benefits for retirees.

Q2 left a message for Westmoreland officials Thursday afternoon but has not heard back.

Related: Environmental groups say they’re suing over pollution at Colstrip coal mine

Related: Westmoreland the latest coal giant to hit hard times

Jay Kohn

Jay Kohn

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