Judge says paying Blackjewel employees is top priority

GILLETTE — Wyoming Blackjewel LLC employees still having problems with their final regular paychecks may have those worked out by Friday.

Concerned over reports of Blackjewel LLC employees not being paid, a federal bankruptcy court judge held a short Fourth of July hearing where he made it clear that getting workers the money they’re owed is a top priority.

“I know this may be interfering with the holiday plans for some of you, but I’m sure you’d agree it’s minimal (compared) to what these employees are dealing with,” said Judge Frank W. Volk from U.S. Bankruptcy Court for the Southern District of West Virginia.

He said he convened the hearing when he learned that some Blackjewel LLC employees have been presenting paychecks to their banks that either were not accepted, having holds placed on them or being dishonored.

It soon became clear there are two main issues with the 1,700 company employees who have been locked out of Blackjewel’s 32 coal mining operations. Those include hundreds of employees at the Eagle Butte and Belle Ayr mines in Campbell County, where workers didn’t have their pay electronically deposited into their accounts as usual Friday. Instead, about 700 cashier’s checks were flown in and distributed Sunday.

While some local banks accepted the cashier’s checks right away, others were skeptical to suddenly see so many out-of-state checks hitting at once and flagged them as suspicious, explained a Blackjewel attorney. He said the problem now is only with two banks.

The company’s eastern employees are normally paid by check, including Friday. But when Blackjewel LLC filed for Chapter 11 bankruptcy reorganization Monday morning, then unexpectedly had $20 million in emergency financing pulled, it meant there wasn’t money to cover those checks and the paychecks of those workers “can’t be satisfied yet,” the attorney said.

For the Wyoming operations, the cashier’s checks were drawn on United Bank of West Virginia and Volk ordered Blackjewel clear up any issues left with having those checks honored.

“The urgency of this matter for the court is equal to, at a minimum, I consider this matter to be of the highest priority,” Volk said.

He ordered another hearing for 8 a.m. Mountain Standard Time on Friday for an update.

“Hopefully, we’ll have good news" about the Wyoming checks "and receive some assurance on the timing of ameliorating the efforts on the eastern side," Volk said.

In the mean time, the company secured $5 million in emergency financing Wednesday to bring back a few employees to provide security and maintenance at its closed mines. A condition of the funding was the resignation of Blackjewel President and CEO Jeff Hoops Sr. and hiss family members.

A new chief restructuring officer has been named, Dave Beckman, and the company at present continues to work to find financing to reopen its mines and operate through a Chapter 11 reorganization.