By: Dylan Coyne
St. John’s Law Student
American Bankruptcy Institute Law Review Staff
In In re Alpha Natural Resources, Inc., a Virginia bankruptcy court allowed a coal mining company to reject its collective bargaining agreements thereby permitting the company to sell its revenue generating assets. Alpha Natural Resources, Inc. (“Alpha”) is the largest coal producing company by volume in the United States and began to sustain severe financial difficulties after the coal industry began to decline in 2011. In an effort to stay afloat, Alpha began to cut costs by freezing wages, laying off employees and reducing benefits for non-union employees in 2013. In its Chapter 11 case, Alpha explored selling its core revenue generating assets to its prepetition lenders (the “Bidders”), who served as a stalking horse for the sale. The Bidders, however, were not willing to assume Alpha’s liabilities to Alpha’s unions as required under the collective bargaining agreement or under the Coal Industry Retiree Health Benefit Act of 1992 (the “Coal Act”). Accordingly, Alpha filed a motion for an order rejecting the collective bargaining agreements. Alpha’s unions objected to the request, arguing that §§ 1113 and 1114 of the Bankruptcy Code do not apply to Alpha since Alpha is liquidating and those sections address reorganization, and further that Alpha had not satisfied the elements of those same statutes.