Next month, about 600 employees suddenly laid off in July 2019 at two Campbell County coal mines formerly owned by Blackjewel, LLC, plus about 1,100 of the company's employees in central Appalachia will learn about the fate of a proposed settlement of a federal lawsuit.

On March 3, the judge of the U.S. Bankruptcy Court of the Southern District of West Virginia will decide whether to approve a settlement of a class action lawsuit, said Ned Pillersdorf of Prestonsburg, Ky., who was among the attorneys for the employees in the lawsuit.

The proposed settlement was tentatively reached in March 2020, but sealed until Sept. 1.

The class action lawsuit was filed against Blackjewel because it violated the Worker Adjustment and Retraining Notification (WARN) Act, which requires large employers to give  employees a 60-day notice when a plant closing and/or mass layoffs are pending.

The employees of the Belle Ayr and Eagle Butte mines got no notice when the Milton, W.Va-based Blackjewel LLC, and related companies suddenly filed for Chapter 11 business reorganization Bankruptcy Protection on July 1, 2019.

They and employees at about 30 mines and other operations in Kentucky, Virginia and West Virginia were sent home, and shocked them and their families and communities.

In October 2019, the U.S. Department of Labor ordered Blackjewel to pay about 500 Belle Ayr and Eagle Butte employees nearly $800,000 in back wages for the last week of June 2019.

But the class action lawsuit under the WARN Act was different, and took a long time to get to having the March 3 hearing set because of delays with some employees having medical issues and an insurance case among other issues, Pillersdorf said

According to the proposed settlement, two main categories in this case apply under bankruptcy law: The first is "an allowed priority claim" equal to 60% of sixty days' pay and benefits for each member of the class and totaling $14.6 million. The second is "an allowed priority wage claim" totaling $2.7 million.

The unknown factor is how much money is in the Blackjewel estate, Pillersdorf said, adding this may be the most complex bankruptcy case in U.S. history.

He complimented the people who are now in charge of Blackjewel who have been trying to find whether former CEO Jeffrey Hoops Sr., may have siphoned from the company before it declared bankruptcy.

The settlement does not mean any of the defendants are admitting any facts of the lawsuit, nor are they admitting any liability, according to court records. "The Parties acknowledge and agree that they are entering into this Settlement Agreement to avoid further costs of litigation ...."

Pillersdorf said the proposed settlement is good, especially because workers don't fare well in bankruptcy cases.

But the questions remain about whether the money is available and what the judge will decided on March 3, and Pillersdorf remains cautious about the outcome.

"I've always tried to lower expectations," he said.

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