Posted on 07/23/2019 2:41:11 PM PDT by lowbridge
On 1 July, Missy Cole was notified by her bank that her husband’s most recent paycheck had bounced, leaving their account more than $1,000 in the red. Her husband had worked as a coalminer for nearly three years at one of the eastern Kentucky mines operated by Revelation Energy affiliate Blackjewel mining.
But both companies had filed for chapter 11 bankruptcy, a financial move that has implications far beyond just laying off staff as the ex-workers now wait for bankruptcy proceedings to play out. Critics say the move is a ploy increasingly used in the struggling industry to avoid paying workers what they are owed.
“A layoff is always expected with miners. It’s always in the back of your mind and it’s no surprise when it happens in the coal industry. But this is much more than a layoff,” Cole told the Guardian.
“We have absolutely no access to our bank accounts. Those accounts are still negative, and falling deeper into the negative daily. We cannot even touch his 401(k) to withdraw money to survive on without the signature of the Blackjewel mining CEO or his personnel.”
One of the largest coalmining operators in the United States, Blackjewel abruptly shut its mines after filing for bankruptcy, jeopardizing the jobs of about 1,700 workers in Virginia, West Virginia, Kentucky and Wyoming.
Workers are still unsure if they will be permitted to return to work and for how long, if they will be paid for bounced checks and what will happen to their health insurance and benefits.
“It’s been very hard, not knowing if your going to be able to put food on the table for your three kids,” said Mark Turner, a Kentucky miner at a Blackjewel-operated mine.
(Excerpt) Read more at finance.yahoo.com ...
Companies like this are a major part of the reason why unions were invented.
Good luck with the 401ks. They may be just a piece of paper.
In bankruptcy court, workers are near the top just below administrative costs. They will almost certainly get paid.
True but that doesn’t mean much to someone living month to month when the reimbursement comes a year or two later.
Aren’t 401k plans separate from the company? Where I work, and everyone else i know with a 401k, those accounts are held by companies such as Transamerica and Fidelity.
So a company bankruptcy should have no effect on the 401k vested benefits.
If the company didn’t properly withhold and submit these funds to the administrator of the 401k, then all bets are off.
“We cannot even touch his 401(k) to withdraw money to survive on without the signature of the Blackjewel mining CEO or his personnel.”
I believe this to be patently false. Unless it isn’t really a 401k. Otherwise the company has no ability to use those funds as they are FBO the account owner.
That does a lot of #$#$ing good now, while their monthly payments bounce and they can’t pay the mortgage.
I know, everyone should plan for a rainy day, not all can.
I have been in the same position.
Employees who are owed money stand in the front of the bankruptcy line and usually get paid eventually.
Don’t look to be bailed out any time soon though.
It is a shock, it sucks, I know from experience.
Yeah, if anyone gets paid, the workers will be first.
Exactly what I was thinking. My 403B and, later, 401K contributions were always managed by a plan administrator and the money was out of the company. I’m very surprised to hear the woman thinks they need the CEO to sign off on access to their 401K funds. Perhaps it is as you speculate...somehow they used a bogus “internal IRA,” not one run by and outside plan administrator.
The 401K plans generally have the workers contributions along with the employer matching funds. The workers may be able to access their money, but none of the matching funds. Depending on the age of the employee, taxes and early withdraw penalties will burn near 30% of any funds taken. It sucks but best bet is apply for unemployment and talk like hell to their creditors. It a crap deal but as long as they’re up front and trying most banks will help. The thanks goes to Obama regulations and coal plant shutdowns and some pretty lousy corporate azzholes. IMO
This is truly heartbreaking. These are people who were working hard for a living, and doing their best. Contrast this with the Clintons, and the money they've brought into their tax-free ‘not for profit foundation’, as just one example. In my view, anyone who gets up each day and works hard to make ends meet should be able to sustain a happy life for their family. When that becomes impossible in any nation, that nation is in trouble. Trump is doing a good job in reversing this trend. I pray that he stays in office and is able to complete the job.
Yes, Chapter 11 and bounced paychecks don’t add up.
Domestic support obligations (a coal mining corporation shouldn’t have any of those
Administrative expenses
Certain post filing/pre order expenses in an involuntary bankruptcy (which this doesn’t appear to be)
Up to $10k in unpaid pre-filing wages for work within 6 months prior to the filing (which should cover this case).
Everything else that is unsecured.
So the only way the workers don’t get their money is if the court lets the lawyers and bosses suck everything out of the estate and then convert it to a Chapter 7.
The land and most of the equipment is probably subject to liens.
It’s true that, once secured creditors are paid, workers are close to the front of the line. But if this is strategic it’s probably b/c the money behind the mine has a secured interest that would wipe out all unsecureds, including workers.
That depends. And next after unpaid wages are certain contributions to employee benefit plans. (507(a)(5))
If they don't have assets for these priority claims, the judge should convert it to a 7 and cut off the lawyers.
Yeah, the 401k’s should be in a trust company.
But it wouldn’t surprise me that the company hadn’t made contributions for 6 months.
A loan requires the signature of the plan's trustee -- who is likely to be the CEO of the company.
I am the trustee of my own company's 401(k) plan, and I have to sign twice if I take a loan from the plan: once as the account holder (the "employee") and once as the trustee.
Good luck with the 401ks. They may be just a piece of paper.
If so, someone is going to prison.
Not an expert but I understand that contribution to the 401k is made to an outside agency as soon as they can (one or two days).
So at most one pay period would be affected.
Someone with more knowledge can correct me if I am wrong.
Where do taxes fit in?
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