About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

71 Stan. L. Rev. 879 (2019)
Bankruptcy as Bailout: Coal Company Insolvency and the Erosion of Federal Law

handle is hein.journals/stflr71 and id is 909 raw text is: ARTICLE Bankruptcy as Bailout: Coal Company Insolvency and the Erosion of Federal Law Joshua Macey & Jackson Salovaara- Abstract Almost half of all the coal produced in the United States is mined by companies that have recently gone bankrupt This Article explains how those bankruptcy proceedings have undermined federal environmental and labor laws. In particular, coal companies have used the Bankruptcy Code to evade congressionally imposed liabilities requiring that they pay lifetime health benefits to coal miners and restore land degraded by surface mining. Using financial information reported in filings to the Securities and Exchange Commission and in the companies' reorganization agreements, we show that between 2012 and 2017, four of the largest coal companies in the United States succeeded in shedding almost $5.2 billion of environmental and retiree liabilities. Most of these liabilities were backed by federal mandates. Coal companies disposed of these regulatory obligations by placing them in underfunded subsidiaries that they later spun off. When the underfunded successor companies liquidated, the coal companies managed to get rid of their regulatory obligations without defaulting on the pecuniary debts they owed to their creditors. * Joshua C. Macey is Postdoctoral Associate, Cornell Law School. Jackson Salovaara works in the renewable energy industry. During the editorial process for this Article, Mr. Salovaara was employed by McKinsey & Company, a global consulting firm. McKinsey offers consulting services to coal companies, including on restructuring matters. Mr. Salovaara did not advise any coal companies while employed at McKinsey, nor did he have access to nonpublic information on any coal company. We wish to thank Akhil Amar, Vince Buccola, Tony Casey, Matthew Christiansen, Don Elliott, Bill Eskridge, Shannon Grammel, Kelly Holt, Bruce Huber, Rich Hynes, Melissa Jacoby, Dan Lashof, Bruce Markell, Daniel Markovits, Jerry Mashaw, John Morley, Adam Pritchard, Mikael Salovaara, David Skeel, Adam Sorensen, Tom Steyer, David Weiskopf, Shelley Welton, and Jay Westbrook for their edits, comments, and support. Finally, we are especially grateful to the editors of the Stanford Law Review for outstanding editorial support. All errors are our own. 879

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most