Coal Miners Block Train Tracks in Protest of Company’s Bankruptcy Gaffe

(Bloomberg) -- Coal miners angry about a lack of pay during Blackjewel LLC’s bankruptcy are preventing a train from leaving one of its Kentucky mines, escalating tensions as the cash-strapped company scrambles to sell assets.

Since about 4 p.m. Monday, groups of miners have taken shifts blocking railroad tracks outside Cumberland, Kentucky, preventing a train from exiting a Blackjewel-owned coal mine, Mayor Charles Raleigh said in an interview. About 40 miners were at the tracks on Tuesday morning, he said. Local media have posted photos of miners camped out on the tracks.

“The very coal they’re trying to haul out of there in this train, these men mined,” Raleigh said, adding that some miners, including his son and brother, have been without pay for close to a month. “They’re not out there to fight. But they want to fight for their money.”

The fate of employees is playing a bigger role in corporate bankruptcies as thousands of workers lose their jobs, and the issue has been embraced by some politicians and at least one presidential candidate. Dismissals caused by the collapse of Toys “R” Us triggered the initial uproar, and saving jobs became a key factor in keeping Sears Holdings Corp. out of liquidation. Mortgage lender Stearns Holdings LLC emphasized helping employees in its bankruptcy pleadings this month.

Calls to attorneys for Blackjewel weren’t immediately returned. The company listed about 1,700 employees in its bankruptcy filing.

Both creditors and miners have criticized the way Blackjewel has handled its bankruptcy financing, which started on July 1. A federal judge last week approved a expedited sale process for several Blackjewel coal mines, resulting in a $8.1 million down payment from Contura Energy Inc. to help keep the company afloat.

Read more: Blackjewel’s DIP-Financed Paychecks Bounced

The miners in Harlan County, Kentucky are “infuriated” over missing pay for work done in June, Harlan County Judge-Executive Dan Mosley said in an interview. Paychecks have bounced or never arrived at all, he said.

“We’re in survival mode,” Mosley said, adding that community members have assembled food boxes to help people affected by the bankruptcy, and that he has written letters for miners to give to their own creditors in hopes of getting leniency on things like mortgage payments. “It’s a sad situation.”

Some Blackjewel miners earlier this month filed letters to the bankruptcy court in Huntington, West Virginia describing the hardship brought on by the bankruptcy, including living week-to-week and struggling to buy groceries.

The Kentucky state police have no plans to roust the protesters unless they get a complaint from CSX Corp., the railway owner, and Sgt. Joe Dials said that they they haven’t heard from CSX as of Tuesday morning.

Calls and emails to CSX weren’t returned.

The case is Blackjewel LLC, 3:19-bk-30289, U.S. Bankruptcy Court for the Southern District of West Virginia (Huntington).

--With assistance from Will Wade.

To contact the reporter on this story: Jeremy Hill in New York at jhill273@bloomberg.net

To contact the editors responsible for this story: Rick Green at rgreen18@bloomberg.net, Dawn McCarty

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