The Spark

“The emancipation of the working class will only be achieved by the working class itself.” — Karl Marx

Bankruptcy court:
A tool used by corporate thieves

Nov 8, 2004

"I very much sympathize with the position of the UMWA (United Mine Workers of America). It's awful that these people are displaced. Unfortunately, that's our system right now." So said financier Wilbur T. Ross about his takeover of Horizon Natural Resources.

In taking over Horizon, one of the largest coal mining companies in the U.S., Ross junked the UMWA contract at two Appalachian mines. Eight hundred unionized workers were laid off. Three thousand retirees were stripped of company pensions and health care.

This attack on the miners was given the blessing of the courts. Federal bankruptcy Judge William Howard had ruled that Horizon could junk its union contracts, retiree pensions and health care in order to make itself more "attractive" to potential buyers.

International Coal Group, Ross's newly organized company, bought Horizon for a fraction of what its assets are really worth – and then went on to sell off the two unionized mines to Massey Energy Company. Massey will re-open the mines, hiring only non-union workers, now that the contracts are junked. International Coal Group will keep and operate over 20 non-union Horizon mines.

Horizon is one of the first coal companies to claim bankruptcy as an excuse for breaking promises made to workers over the years. But hundreds of companies in other industries have been using the bankruptcy courts to junk contracts and strip workers of jobs, pay, pensions and health care.

Bankruptcy is a con game. Big companies cook their books, run to court, dump pensions and benefits – and all the while continue to function and even make profits. And financial vultures like Wilbur Ross buy up companies after the courts declare it bankrupt. It's all financial manipulation.

In fact, Ross took over Horizon with part of the money he got from his recent sale of International Steel Group (ISG), a company he had earlier created by buying up four large steel companies after they had declared "bankruptcy" and junked union contracts.

This "system" that Ross talks about to justify what he is doing is called "capitalism" – a system that enriches robber barons at the expense of working people.

Wouldn't it be ironic if coal miners, one of the first groups of industrial workers that enriched some of the first robber barons, turn out to be the force that makes this century's corporate thieves back off! That's exactly what they did in 1978, when they refused to accept a concessions contract the bosses attempted to impose on them. Against the coal companies – backed up by the courts, the cops, the National Guard, the U.S. Congress and President Jimmy Carter – they organized a strike that shut down virtually every eastern coal mine, union and non-union alike. They forced all these vultures to shove it.

They might do it again.