GILLETTE — Three weeks after closing its coal production operations and putting 1,700 people out of work, Blackjewel LLC continues to work to secure the financing it needs to reopen the mines and recall its workforce.
It also doesn't consider those workers terminated.
That was part of the message the company sent in a Monday morning update for employees, including nearly 600 people locked out of its flagship Belle Ayr and Eagle Butte mines in Campbell County.
The update follows up an emergency hearing Friday afternoon in the U.S. Bankruptcy Court for the Southern District of West Virginia in which the company secured another $2.9 million loan to pay its health insurance and workers’ compensation premiums through the end of July.
Employees also were reassured that any money in their health savings and 401(k) accounts are unaffected by the bankruptcy and shutdown. Blackjewel senior management did admit the company had not made some of those employee contributions to those accounts before the July 1 bankruptcy filing, but provided no other information about when or how it could make those payments.
“Yes. The funds in your 401(k) account belong to you — not the company — and are therefore not affected by the Chapter 11 filing,” the statement says. “That said, we are aware that certain amounts due prior to the filing were not paid as of the time Blackjewel filed for Chapter 11 protection.
“We are currently reviewing this situation with the hope of bringing the 401(k) payments up to date as of the filing.”
The statement also answered a question many locked out workers have been asking for the past three weeks about accessing the money in their retirement accounts to help support their families. The answer is no.
“Blackjewel’s employees have not be terminated, and Blackjewel’s 401(k) plan does not permit employees to make withdrawals from their 401(k) accounts until the employee quits or is terminated,” according to Monday’s update.
“We understand how many of you are hurting and are working diligently to get you back to work,” the statement says. “As there is news to share, we will post additional information to our restructuring website. … Please know that management continues to do everything possible to secure additional financing to safely resume as much of Blackjewel’s operations as possible and bring more employees back to work.”
While the optimal goal is to secure a financing package that allows the company to reopen all of its mines and resume operations at all its locations in Wyoming, Kentucky, Virginia and West Virginia, it’s also possible investors may only be interested in loaning money for or buying certain assets, said Blackjewel attorney Stephen Lerner during Friday’s hearing.
Along with arguing for the $2.9 million loan, the company revealed other financial information when questioned by Judge Frank. W. Volk, including that it still owes about $15 million in unpaid pre-bankruptcy payroll taxes, benefits and wages. Most of that money is from the June 28 payroll for the eastern employees, who had their paychecks bounce and deposits reversed by their banks.
Lerner also revealed that part of the difficulty in getting an agreement on financing to reopen and operate through the bankruptcy process is because investors and/or potential buyers have shown more interest in the Wyoming mines and not the ones in Appalachia.