Already pressured to secure financing to reopen its coal mines and resume operations, the heat has been turned up on Blackjewel LLC to make good on more than 1,000 rubber paychecks that have left hundreds of workers with negative bank balances.
In a sternly worded letter to the U.S. Bankruptcy Court for the Southern District of West Virginia, Kentucky Attorney General Andy Beshear and Virginia Attorney General Mark R. Herring make it clear the company’s employees must be paid immediately.
“Many miners have found themselves in a precarious state of purgatory and uncertainty: neither working, nor laid off,” they say in the letter. “But regardless of their employment status, it is clear that many have not been paid the wages they have earned, creating financial chaos and a cascade of negative consequences.”
The letter also says Blackjewel’s apparent lack of business savvy likely played a large role in the company’s ongoing struggles to file for Chapter 11 bankruptcy reorganization and having to abruptly close its mines without any notice or warning.
The company filed for bankruptcy on the morning of July 1, then a $20 million financing package that would have allowed Blackjewel to continue operations through the bankruptcy process was pulled at the last minute. In response, the mines were shut down hours after the bankruptcy filing and about 1,700 employees locked out, including nearly 600 at Blackjewel’s flagship Eagle Butte and Belle Ayr mines in Campbell County.
The failed financing not only monkey-wrenched the company’s bankruptcy, it also left about 1,100 workers in Kentucky and Virginia holding bad paychecks issued June 28, the Friday before the filing. In follow-up court hearings, a Blackjewel LLC attorney admits the company had floated those paychecks, anticipating the $20 million in emergency financing would cover them.
When that fell through, not only were banks reversing those deposits, but employees who had already paid bills with that money were left locked out of their jobs with negative bank balances and more debt in overdraft fees.
Many Blackjewel employees have filed letters with the bankruptcy court with stories that “paint a picture of real, concrete, and ongoing harm to the financial well-being and stability of their families,” the attorneys general say in their letter.
“Our Virginia and Kentucky families are in desperate need of their earned income now,” the letter continues. “In fact, as we can see from the attached letters (from miners), they desperately needed that income on the days when their paychecks ought to have been deposited.”
Because their June 28 paychecks bounced, those 1,100 eastern coal miners haven’t been paid since June 14, including missing their latest paycheck that was due July 12. To make the situation worse, because Blackjewel hasn’t admitted it laid off or fired its workers, many in those eastern states are having difficulty filing for unemployment benefits. Also, all are still owed for time worked over the weekend from June 28 through July 1 when the mines were shut down, along with accrued vacation time for those who have resigned.
A little better for
While Blackjewel’s eastern employees are entering a more desperate financial mode with not having been paid for more than a month, the locked out Belle Ayr and Eagle Butte workers in Wyoming have so far missed just their July 12 paychecks. That’s because when the company missed a direct deposit transfer into their accounts June 28, cashier’s checks were flown to Wyoming and given to workers June 30.
Although several local banks at first were suspicious of so many out-of-state cashier’s checks hitting at once, all but 13 of them have since been paid.
Because the situation for Wyoming’s workers is different than for those in Kentucky and Virginia, Wyoming Attorney General Bridget Hill said she doesn’t have the same concerns her counterparts in the east do.
“We are actually not in the same position because Wyoming workers were provided cashier’s checks to cover their prepetition wages,” she said in an email to the News Record. “Initially, there was some concern at the local banks about the validity of the checks, but United Bank confirmed with the banks that those checks were ‘bona fide.’”
Still, she said the 13 outstanding cashier’s checks for Wyoming workers that haven’t yet been honored need to be.
Hill also said she sympathizes with the Blackjewel employees in Kentucky and Virginia who are facing financial ruin and questions why the Wyoming employees were paid through a guaranteed method like cashier’s checks and other workers weren’t.
“We are not sure why prior to filing for bankruptcy the debtor (Blackjewel) choose to pay the Wyoming workers with cashier’s checks, while not doing so for the Kentucky, West Virginia and Virginia miners, but that appears to be the situation.
“While we are frustrated with the overall situation and the impact it is having on our state, Wyoming is not in (the) same position as these other states in terms of the treatment of their workers’ prepetition wages.”
Pay them now
In the mean time, Blackjewel’s overall struggles to secure money to reopen its mines and continue Chapter 11 reorganization isn’t an excuse to leave employees unpaid, the attorneys general say in their letter.
“As the chief legal officers of the Commonwealths of Virginia and Kentucky, we urge an immediate resolution in the form of payment of all paychecks of all Virginia and Kentucky employees of Blackjewel LLC for their earned prepetition wages and commissions.
“All workers who have labored for the company and are owed back wages should be made whole. And they should be made whole immediately.”