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Wyoming and Montana’s Powder River Basin is home to some of the world’s largest surface coal mines. Powder River Basin Resource Council photo

CASPER – Executives of a bankrupt coal firm in the Powder River Basin received more than half a million dollars in bonus payments in the year leading up to the company’s bankruptcy filing, court documents reveal.

Lighthouse Resources paid 11 “insiders” within the company and its subsidiaries a total of $3.3 million, including at least $702,500 in bonuses, in the 12 months before filing for bankruptcy.

These insiders included a president, chief operating officer, treasurer, general manager, two secretaries and four directors.

The company also reported $2.5 million in “payments related to bankruptcy” made during that same period, according to the company’s financial statements.

This comes as the insolvent company asked a federal bankruptcy court last month to reject a $2.7 million pension plan for coal miners, asserting the company needs to cut costs to be able to afford cleanup at its mining site in Montana. Maintaining the pension program would require the company to make annual contributions of about $85,000, according to the company.

The coal firm forecasts cleanup costs at the Decker mine to total as much as $95 million. Exiting the union contract would also save the firm about $200,000 each year by allowing the employer to limit overtime, reduce paid holidays, increase employee contributions to health care plans and contract work out, according to company attorneys.

Lighthouse Resources asked the U.S. Bankruptcy Court for the District of Delaware on Jan. 20 for approval to reject the collective bargaining agreement struck with the union in 2012. The company maintained that eliminating the $2.7 million in pension liabilities is the only way to save enough money to complete reclamation, or cleanup, at the mine site.

The United Mine Workers of America requested that the court block the coal company’s request to exit its union contract.

Lighthouse Resources submitted a tentative collective bargaining agreement to the court on Monday, but it had yet to be approved as of Friday.

Clark Williams-Derry, an energy analyst at the Institute for Energy Economics and Financial Analysis, called the bankrupt company’s claim it needed to reject workers’ benefit to save money for future cleanup bills “disingenuous.”

“When Lighthouse says we can’t pay for miners’ retirement because we have to pay for cleanup, it really sets up a false dynamic of the environment versus workers,” Williams-Derry said. “It hides the fact that company executives and insiders have given themselves golden parachutes and paid themselves generous salaries, bonuses and retirement contributions, when they don’t give those same financial benefits to their workers.”

In addition to paying its executives significant bonuses in the months before the bankruptcy, Lighthouse Resources also asked for court approval to pay five “senior employees” as much as $644,546 in bonuses as part of an incentive program to maintain personnel during the bankruptcy process.

The company will distribute a mere $19,997 in reimbursements and bonuses to 21 union workers at the Decker mine to stay on with the company during the bankruptcy. Lighthouse Resources did not respond to a request for comment.

The Decker mine, located in Montana’s Big Horn County just north of Wyoming’s border, ceased mining for coal in January.

A majority of the mine’s workers live in northern Wyoming.

Upon filing for bankruptcy on Dec. 3, the company laid off 76 workers at the Decker mine. That left 28 active union employees and nine furloughed union employees. An additional 18 non-union employees held manager or administrative positions.

But by Jan. 22, the company had stopped mining for coal and kept on only four union workers at the facility, according to court documents and confirmed by Montana’s Department of Environmental Quality.

It became the first coal mine in modern history to close down in the Powder River Basin, the nation’s epicenter for coal production.

When Lighthouse Resources filed for Chapter 11 bankruptcy at the end of last year, it did so with over $256 million in secured debt. According to court filings, Lighthouse Resources owes Big Horn County in Montana over $6.9 million, the Montana Department of Revenue more than $4.4 million and the U.S. Department of Natural Resources Revenue about $3.3 million, in addition to hundreds of creditors.

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