LEXINGTON -- A bankrupt coal company confirmed during a court hearing Saturday that many Kentucky miners will not be reimbursed for clawed-back paychecks until the company can resume its normal operations.
Employees of Blackjewel LLC, which employs about 1,100 people in Kentucky, Virginia and West Virginia, were last paid Friday, June 28, but had their paychecks pulled from their bank accounts Monday, July 1.
That left many miners who had already paid bills on June 28 and over the weekend with overdrawn accounts and concerns over their finances.
During Saturday's hearing, Travis McRoberts, an attorney representing Blackjewel, said the company hopes to secure additional financing in the coming days to bring back some of its employees for security and other "critical functions."
The company does not have the financing to reimburse the rest of its employees for the clawed-back checks.
Melissa Cole, a Letcher County woman whose husband worked at a Blackjewel mine near Cumberland in Harlan County, said she got her hopes up that the hearing today would bring some resolution. It's frustrating that there wasn't one.
"Everyone is just in limbo," Cole said. "No one knows what to do."
People are getting deeper in the hole the longer they go without money, Cole said.
Her account was initially overdrawn $1,088 when the bank first clawed back the money, but more checks she wrote have come in since, so her negative balance is growing. Cole and her husband had their daughter buy them a gallon of milk Friday, and may need to rely on her for more help.
Cole said some miners use a check-cashing business in Harlan County to cash their paychecks, and there has been a concern that they could have criminal charges for cashing what turned out to be cold checks.
Court documents show the coal company knew there wasn't money in the bank to cover the June 28 checks issued to employees in Kentucky, but instead hoped to get money the week of July 1 to cover the checks.
"To me, that's straight-up fraud," Cole said.
Frank Volk, a federal judge in the Southern District of West Virginia, made no order Saturday on the payment of those workers.
"We know this is not the news you had hoped for, nor is it the result that the management is working towards," Blackjewel said in a statement to its employees. "We assure you that management is doing everything it can to obtain financing to resume normal operations. Once this financing is obtained and operations are resumed, we plan to pay all prepetition amounts due to these employees at that time."
When the company issued checks June 28, the company believed it would be able to secure financing by the time it filed for Chapter 11 bankruptcy on July 1, McRoberts said. That financing plan fell through, and left the company unable to fund the checks it had already distributed.
McRoberts said Blackjewel's management are working "more or less around the clock" to get employees back to work and return the company to its normal operations.
"We are very sensitive to the hardship this has created for people," McRoberts said.