Chateaugay Corp., In re
| Decision Date | 17 September 1991 |
| Docket Number | No. 246,D,246 |
| Citation | 945 F.2d 1205 |
| Parties | , 25 Collier Bankr.Cas.2d 802, 22 Bankr.Ct.Dec. 149, Bankr. L. Rep. P 74,267, 14 Employee Benefits Cas. 1337 In re CHATEAUGAY CORPORATION, Reomar, Inc., the LTV Corporation, et al., Debtors. LTV STEEL COMPANY, INC., BCNR Mining Corporation, Nemacolin Mines Corporation, and Tuscaloosa Energy Corporation, Plaintiffs-Appellees, v. UNITED MINE WORKERS OF AMERICA, Defendant-Appellee, Joseph P. Connors, Sr., Donald E. Pierce, Jr., William Miller, William B. Jordan and Paul R. Dean as trustees of the United Mine Workers of America 1974 Benefit Plan and Trust, Defendants-Appellants. ocket 90-5020. |
| Court | U.S. Court of Appeals — Second Circuit |
William F. Hanrahan, Groom and Nordberg, Washington, D.C., Michael Devorkin, John J. Rieck, Jr., Doar, Devorkin & Rieck, New York City, David W. Allen, General Counsel, United Mine Workers of America Health and Retirement Funds, Washington, D.C., for appellants.
Sharon Katz, Karen E. Wagner, Davis Polk & Wardwell, Kaye, Scholer, Fierman, Hays & Handler, New York City, for appellees.
Before OAKES, Chief Judge, MESKILL, Circuit Judge, and RESTANI, * Judge.
This is an appeal from a judgment of the United States District Court for the Southern District of New York, Kram, J., affirming a judgment of the United States Bankruptcy Court. 111 B.R. 399. The bankruptcy court, in orders dated August 1 and 4, 1988, concluded that the Retiree Benefits Bankruptcy Protection Act of 1988, Pub.L. No. 100-334, 102 Stat. 610 (1988) ("Bankruptcy Protection Act" or the "Act") (codified at various sections of 11 U.S.C. § 1101 et seq.), did not require LTV Steel Company (LTV Steel), BCNR Mining Corporation, Nemacolin Mines Corporation and Tuscaloosa Energy Corporation (Mining Companies) (collectively, with LTV Steel, "LTV") to continue to pay health benefits to their retirees. The bankruptcy court also concluded that the United Mine Workers of America 1974 Benefit Plan and Trust (Benefit Trust) was responsible for the continued payment of retiree health benefits.
We have jurisdiction over this matter pursuant to 28 U.S.C. § 158(d). The bankruptcy court orders were certified pursuant to Bankruptcy Rule 7054(a) and Fed.R.Civ.P. 54(b) on January 15, 1991 by Judge Burton R. Lifland, Chief Judge of the United States Bankruptcy Court for the Southern District of New York. The orders are thus final within the meaning of 28 U.S.C. § 158(d).
We conclude that the Bankruptcy Protection Act does not require LTV to continue payment of the retiree benefits herein at issue. The three mining operations have ceased doing business, the collectively bargained 1984 National Bituminous Coal Wage Agreement (1984 Wage Agreement) has expired, and the continued provision of the retiree health benefits by the Benefit Trust was expressly considered under the 1984 Wage Agreement. We therefore affirm the decision of the district court.
The relevant factual and procedural background to this action is summarized in our decision of December 17, 1990, reported at 922 F.2d 86. In that opinion we held that we lacked jurisdiction to hear this matter as it was then presented because the bankruptcy court orders were not final judgments. We remanded the action for certification of the orders pursuant to Rule 54(b). On March 18, 1991, in a decision reported at 928 F.2d 63, we denied the Benefit Trust's Motion for Reinstatement when we were presented with a statement of finality that failed to comply with the requisites of Rule 54(b).
The Benefit Trust has petitioned for reinstatement once again. The order of the bankruptcy court now comports with Rule 54(b) and we are satisfied that these orders are final and our jurisdiction is properly invoked. We, therefore, confront the issue originally presented to us on September 19, 1990. We address whether the Bankruptcy Protection Act requires LTV to continue the provision of health benefits to retirees of the Mining Companies after they have ceased operations and the Wage Agreement providing for the payment of those benefits has expired.
The Bankruptcy Protection Act amended section 608 of the Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriation Act, 1987, to read in pertinent part as follows:
(a)(1) Subject to paragraphs (2), (3), (4), and (5), and notwithstanding title 11 of the United States Code, the trustee shall pay benefits to retired former employees under a plan, fund, or program maintained or established by the debtor prior to filing a petition (through the purchase of insurance or otherwise) for the purpose of providing medical, surgical, or hospital care benefits, or benefits in the ....
event of sickness, accident, disability, or death.
(3) The trustee shall pay benefits in accordance with this subsection until--
(A) The dismissal of the case involved; or
(B) the effective date of a plan confirmed under section 1129 of such title which provides for the continued payment after confirmation of the plan of all such benefits at the level established under paragraph (2) of this subsection, at any time prior to the confirmation of the plan, for the duration of the period the debtor (as defined in such title) has obligated itself to provide such benefits.
....
(c) This section is effective with respect to cases commenced under chapter 11, of title 11, United States Code, in which a plan for reorganization has not been confirmed by the court and in which any such benefit is still being paid on October 2, 1986, and in cases that become subject to chapter 11, title 11, United States Code, after October 2, 1986 and before the date of the enactment of the Retiree Benefits Bankruptcy Protection Act of 1988.
Pub.L. No. 99-591, tit. VI, 100 Stat. 3341-74 Bankruptcy Protection Act, Pub.L. No. 100-334, § 3(a), 102 Stat. 613 (codified at 11 U.S.C. § 1106-note). LTV filed for bankruptcy under Chapter 11 and has not obtained dismissal of the case or approval of any plan of reorganization under section 1129. LTV was still paying benefits on October 2, 1986, the date that triggered the application of the Act. Based on these facts, the Benefit Trust asserts that LTV must continue to pay the retiree benefits until a plan of reorganization is approved. We disagree.
The Act expressly states that the trustee in bankruptcy, here LTV, the debtor-in-possession, must continue to "pay benefits to retired former employees under a plan, fund, or program maintained or established by the debtor prior to filing a petition [for bankruptcy]." Thus, we must analyze the "plan, fund, or program maintained or established" by LTV before it filed for bankruptcy in order to determine the trustee's obligation to LTV's retired former employees.
The 1984 Wage Agreement provided for the payment of retiree benefits. Article XX of that document is the precise section that governed the continued provision of benefits. Section (a) of Article XX discusses the general purposes of Article XX. Section (b) discusses the 1950 Plans and Trusts, the 1974 Plans and Trusts were covered in section (c), and section (d) of Article XX discusses the term and amounts of employer contributions. Section (a) states, in pertinent part:
This Article makes provision for pension, health and other benefits for Employees covered by this Agreement,.... The benefits to be provided are as set forth under separate plans and trusts referred to in Sections (b) and (c) of this Article.
....
The general purpose of the plans referred to in this Article shall be to provide health care for working and retired miners and their dependents; pensions for miners upon their retirement; health care and financial support for eligible disabled miners; and financial support for surviving spouses and surviving dependents provided by each of the Trusts and Plans referred to in this Article.
Except as otherwise specifically set forth in this Article, it is agreed that the Trusts referred to in this Article are irrevocable Trusts created pursuant to and within the scope of Section 302(c) of the Labor Management Relations Act, 1947, and shall endure as long as the purposes for their creation shall exist.
The Health and Retirement Benefits provision of the Wage Agreement continues to describe, in detail, the 1974 Benefit Trust. It states: "The 1974 Benefit Trust provides certain health and other benefits, not including pension benefits, and the terms and conditions under which those benefits will be provided are as set forth in the plan under the 1974 Benefit Trust and under the terms of this Article."
In subsection (3)(ii) of section (c), the plan states:
The 1974 Benefit Plan and Trust provides health and other non-pension benefits during the term of this Agreement, to any retired miner under the 1974 Benefit Pension Plan or any successor plan(s) thereto who would otherwise cease to receive the health and other non-pension benefits provided herein because the signatory Employer (including successors and assigns) for whom such miner last worked in signatory classified employment is no longer in business.... For purposes of determining eligibility under the 1974 Benefit Plan and Trust, an Employer is considered to be "no longer in business" only if the Employer
(a) has ceased all mining operations and has ceased employing persons under this Wage Agreement, with no reasonable expectation that such operations will start up again; and
(b) is financially unable (through either the business entity that has ceased operations as described in subparagraph (a) above, including such company's successors or assigns, if any, or any other related division, subsidiary, or parent corporation, regardless of whether covered by this Wage Agreement or not) to...
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