Alpha Natural Resources can pay potential bonuses of up to $11.9 million to senior managers during its bankruptcy, a judge has ruled.
A spokesman for the United Mine Workers of America said on Friday that the union is considering whether to appeal the ruling.
UMWA President Cecil E. Roberts blasted the bonus proposal in a statement, calling it greed.
“I am constantly amazed that our nation’s laws allow the very people who drove a company into bankruptcy to get thousands, if not millions, of dollars in bonuses as part of the bankruptcy process,” Roberts.
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Efforts to reach someone at Alpha’s Bristol, Va., offices during the snowstorm on Friday were not successful.
$11.9 millionin potential bonuses for senior managers during bankruptcy
However, Alpha said in court motions that the payments would be reasonable and justified because the expertise of senior managers will be critical in efforts to restructure and return the company to profitability.
The potential bonuses would motivate executives to continue working hard in a tough environment to build value in the company, according to its request.
The UMWA, along with union health and retirement funds and a government watchdog, had opposed the request.
Opponents argued the bonuses would merely reward Alpha managers for work they’re already being paid well to do, and would not be proper given the company’s financial distress.
The U.S. Trustee’s office also pointed out the company has asked to end payments for non-union retirees’ life insurance and health benefits in order to save about $3 million a year.
Judge Kevin R. Huennekens approved the bonus plan at a hearing in bankruptcy court in Richmond, Va., on Thursday, according to Phil Smith, spokesman for the UMWA, and the court’s website.
Smith said the UMWA is looking at whether to appeal.
Alpha Natural Resources has asked to end payments for non-union retirees’ life insurance and health benefits in order to save about $3 million a year.
Other coal companies have received permission for executive bonuses during bankruptcies.
Under the incentive plan, 15 Alpha managers deemed to be key employees can qualify for bonuses this year from a pool of between $3.4 million to $11.92 million, based on how well the company meets goals in areas such as cutting costs.
Different executives would get different amounts — some more than twice their base salary, according to a court document.
The managers won’t get bonuses if the company doesn’t meet a number of targets.
Opponents of the request complained that the requirements are set to be too easy to satisfy, however.
Alpha has mines in Eastern Kentucky, West Virginia, Virginia, Pennsylvania and Wyoming.
It is one of the nation’s largest producers, but like others has struggled to deal with competition from cheap natural gas and other factors, including tougher environmental rules, oversupply and debt.
Coal production and jobs in Central Appalachia, which Alpha has most of its mines, have plunged since early 2012.
The company has idled or closed more than 80 mines since 2011, most of them in the region that includes Eastern Kentucky and southern West Virginia.
Several other large coal companies have declared bankruptcy in recent years, and analysts say more could join them this year in seeking protection from creditors.