Bankruptcy settlement could pay coal workers $17.3 million

GILLETTE — Some 1,700 employees of a bankrupt coal mining company would get up to $17.3 million in back pay under a proposed class-action settlement.

The former employees of Milton, West Virginia-based Blackjewel in Wyoming and Appalachia could get checks early next year depending on the outcome of bankruptcy court hearings this fall, said Ned Pillersdorf, an attorney for the employees.

“I think it’s a very good settlement,” Pillersdorf said.

The employees and their former employer, which filed for bankruptcy in July 2019, reached the tentative settlement in March. The document remained sealed in U.S. Bankruptcy Court for the Southern District of West Virginia until Sept. 1.

Blackjewel abruptly and without notice shut down its 32 operations over five states and locked out about 1,700 workers on July 1, 2019. That included nearly 600 coal workers at its flagship Eagle Butte and Belle Ayr mines in Campbell County. Another 1,100 workers in Appalachia were also locked out.

To make matters worse, the Appalachia workers saw their final paychecks bounce. The Wyoming employees also missed getting their regular paychecks, but did receive cashiers checks a few days late.

The company's bankruptcy filing also revealed Blackjewel had not deposited employee contributions to their retirement and health savings accounts.

When Blackjewel's $20 million emergency bankruptcy funding was pulled, so was the company's ability to cover the paychecks it had issued to the Appalachia workers.

Many returned to work at the Wyoming mines after their purchase by Eagle Specialty Materials, an affiliate of Jasper, Alabama-based FM Coal, in October.

The U.S. Department of Labor in October ordered Blackjewel to pay about 500 employees at Belle Ayr and Eagle Butte nearly $800,000 in back wages for the last week of June 2019.

An unknown factor in the settlement is how much money is available in the Blackjewel estate, Pillersdorf said.

Former Blackjewel CEO and President Jeffrey Hoops Sr. has maintained throughout the bankruptcy process that he and the company did everything they could for employees. Even so, Hoops was forced out as CEO just days after filing for Chapter 11 protection and he, his family and estate are now being sued by Blackjewel.

In a July 4, 2019, statement, Hoops said that "no one is hurting more than me" over the messy way the bankruptcy unfolded, including the denial of operating financing, numerous emergency hearings and a stern rebuke from the bankruptcy judge about workers not being paid.

“I’d like to know how being a multimillionaire is hard on him?” asked one Wyoming Blackjewel worker in response to Hoops. At the time, he declined to be identified because he hoped to be called back to work soon.

“I would think a good CEO and president would just do that and not complain about it if that’s what needed to be done," he said. "He has the hardest time? Walk in my shoes, where we’re wondering how we’re going to feed our kids. We’re here because he drove us here.”

An attorney for Blackjewel, Joe Supple, didn't immediately return a phone message seeking comment on the proposed settlement.

The bankruptcy is among several that have roiled the U.S. coal industry in recent years. Production in the Powder River Basin of Wyoming and Montana, which supplies about 40% of the nation's coal, has fallen by about one-third over the past decade as utilities generate more electricity from inexpensive natural gas and increasingly inexpensive wind and solar power.

Production in the basin this year alone has fallen nearly 25% amid lower electricity demand due to the coronavirus and U.S. economic downturn.