violation of the act because it is not provided more than eight billion dollars of security to the plan the plans plain must be rejected for two reasons st the statute does not requires actually provide security the nd reason is that even if a co op or such as arch coal were required to provide the security that the access the actual signatory operator must provide that security has been provided as a threshold matter this court has passed with resolve the parties competing views that  which a related entity is on the hook if the premiums aren't paid but a related entity is not on the hook so if a security isn't supplied well several reasons  demonstrated structure within the act for related persons for example to be responsible for some obligations but not others can radiate signatories to be responsible for some of the vision and others with respect to the security itself of the day obligation under this act lasts for the lifetime of the people who are in time to benefits so it's a very long trail of in this case might be sold to other rd parties so progress was focused on making sure that the premiums were always paid and previews are paid  monthly ongoing basis for the duration of the existence of the plan so that the plant has assets to walk with which to operate by comparison security is posted once and it remains then that's the situation that we're concerned with because if that doesn't happen the question is can the plan go after a related entity and what i what i'm not quite following as we know what happens if the premiums aren't paid the statute says project signatories that existed when this entire coworkers confronted acted and so they were in business there would be a right of reply and should those companies fail to provide the security to go into court and seek an injunction requiring them to provide it which is also true of the premiums if they weren't paying the premiums they could do the same thing with respect to the premiums right but we did that but there's everybody agrees the related entities are on the hook for the premiums when they also be on the hook for the security or because there would be no need to because they are on the hook for the premiums and the premiums are what the plant needs to conduct its operation and to pay for the benefits then why was security to pay the premiums so if they cease to pay premiums there's nowhere to go to force a rd party such as a related person to to pay the premiums and to assume the responsibility for providing it to the actual  become a retirees rather become eligible for the plan and the security was intended to provide years worth of coverage in that situation and now here is where the coverage of no longer people and it's not an amount required to be paid into the fund it's never paid actually paid to the plan it's an instrument a security instrument that is held it doesn't become an asset class and the only time the plan should take the money in the how can we find in your favor without challenging the plans having drawn down the security by simply finding that the security was provided it's that it's security arches only obligation even if we assume that it has a joint serve a liability for security that is not posted is it secure it is not posted here the security was provided  be provided it's the point doc of itself that that defines when they will take the security so i mean i think a fair reading of this paragraph to correct me if i'm wrong is that you're saying that the drawdown violated become an asset of the plan it's not an asset of the plan just because it's provided it's not paid to the point as a premium or as a liability in fact over time it's return to the operator go down so the only time they can take in the asset of cash which they received from this letter of credit is if they bring in the the beneficiaries into the plan and provide the benefits then they can use it buy an asset and use it to provide benefits for those nurses but if if the if the security was drawn down and was used to pay benefits yes then would there still be an operator i'm just saying that if the security is used it's gone down on i don't know if i'm using the right terminology is drawn down on and it's the out of the proceeds from that are used to pay benefit then there is no particularly anymore it was used in the way that you think is the right way then would you say at that point that there's no requirement to have a security in place or would you say no there is no requirement of security in place well there the reason they would draw down security of any type to provide benefits is because the benefits are being provided right so their st right would be to seek to compel the statutorily level party which in this case could be the the security is used is liquidated and the proceeds are used to pay benefits it seems to me that there would still have to be a security in place so then the summit city would have to provide a security well because that that's  done for one year and their future benefits for future years those are going to have to be paid and presumably the statute contemplates that there will be a security in place for the payment of those future benefits also well jobs should  if they used the security deprived benefits you have been how would they come back to arch and say you have to pay for the same you know i'm not i'm not asking about who they're going to i'm in i'm even talking about subsequent years i think the way i understand the way security works and i think this is what was said in response to the viewer's question is this here is designed to allow for the payments for one year so let's just suppose that happens they're still subsequent years and as to those subsequent years wouldn't there be a requirement to have a security in place to provide a backstop for the payment of benefits in those subsequent subsequent years to the statute doesn't match it doesn't require that it simply says that the related person will provide the security that sort of measure if you will the measure of damages or liability when the plan has to take in beneficiaries now if the parties still exist that and be required to provide the benefits then they're going to be actions taken against those parties to provide the benefits for all the beneficiaries of the plan has itself provided benefits for so whether one would characterize the receipts for example if they plan in these beneficiaries and and then arjun later was sued successfully by the plan because it's a related person and should have provided benefits then what would the recovery be would be just the obligation to provide for our to provide benefits going forward from there on because the security was used to pay those benefits or with the obligation be to reap characterize to  the letter of credit was arranged by patriot coal which was a new parent that was not a co op into d c but it did arrange with this security company to provide a letter of credit but in other words when asking is couldn't are to conclude the problem for our cheer is it's is the terms of the letter of credit which it could have influence magnum or its successor patriot goes on i don't think it it could successfully have done that because a letter of credit is actually a form letter credit that the plan requires so i just ask you  ceasing to provide the benefits or the plane was the beneficiaries and that's the just jump if the problem that we have here is because the benefits never stop being provided because ours has a statutory duty to provide the benefits which it immediately accepted it was assumed but the letter of credit terms which the plan exercised says that well although the better credit is with the purpose of compensating the plan for years worth of benefits if we have to take the people in the letter credit itself permitted them to convert this letter of credit into cash and our whole point is the fact it was converted to cash doesn't make it any less security cash and probably better security than a letter of credit so their whole case and their whole theory here is to throw up their hands and say well the cash is not secured and that's just a diversion on their part because the a letter of a compliant letter that was provided they exercise their right to take it but now they want to arch to put up another one and they still have the proceeds from that letter of credit that have the proceeds of what is intended by the act to serve as the recourse or resource of the plan in the event that it ever has to take these beneficiaries and you didn't quite argue that the remedy is quite to avoid unjust in which we didn't specify that as a remedy the trustees or charge even in their own plan documents with establishing the rules for security in our view we don't have an obligation for any amount required to be paid by such an operator under this section that happened that was done if you hold a letter of credit and amount required to be paid to squeeze it in and make it a liability d of arch companies have already paid so that the problem well are you saying that i hear you saying that you cannot be your wife to pay again we should not be resigning and we hope the court will agree with us related person even if we're obligated for security is as a poet or with our subsidiaries then subsidiaries to provide a later date that's the statutory obligation it was complying with the only reason we're here today is because the plant unilaterally took the letter of credit we didn't terminate it nobody on on that side terminated the letter read it in fact it was draw down so we were fully compliant and are full of course we're fully compliant and the plan of knowledge is that yes we do have that hash so they are the ones who are obligated t perfect person hasn't happened before them never will for this situation they don't have a trustee resolution or anything that addresses this unique situation our position is it's up to them to decide h treated but it is not large a statutory obligation as a entity that may be that may be required by virtue of a patrol group related person status to provide it that you don't hear that there were that we don't hear but the reason we don't have to provide it is because we believe they should characterize it as security because that's what it was before they cashed it common with an obligation to take in the beneficiaries and they didn't do that so they can't call it an asset which is what they're doing here as justification for requiring us to post another letter of credit saying it's gone it's  premium required to be paid congress used the broader phrase in situations where it wanted to reach other types of pain as here is it any amount for wired to be paid for example such a nine thousand and seventy dollars or a requires operator's pay premiums and only there's a bunch of related entities that are possible then the way that you're considering the statute as i understand it is that when the signatory operator enters into bankruptcy then that  right so then the way you perceive it is we get a drawdown on the letter of credit we take those funds and we will only need to use them to pay benefits we can just do whatever we are with them we treat it as an asset and then not suppose that the related entity that becomes a took over the i people in the forty days that followed that between with that plan that we call the security faces a looming bankruptcy and the expiration of the existing letter credit could have been triggered so it doesn't quite happen that way this is the only being used to pay the beneficiaries which i understand it is not a dispute about that but let's just assume that that's the case then you have that as an asset and then you also have a security so you have the asset which is an amount of funds that's there to supply benefits for a year and then you also get a security that arch is supposed to supply that is designed to do the same thing provide funds to pay benefits for a year so there's two dollars catches of money basically that are designed to do the same thing and then let's suppose that another then our show goes bankrupt and then the next related entity that's on the conveyor belt just takes the same position that our city and then under your view i take it the plan could do exactly the same thing again they would draw down on the security that they were triple taking ownership of those entities patriot added those applicants its existing letter of credit and so we released american letter writing but what happened here took over the i q obligation but it made no arrangements either pages to take over with ranges that their banking pager to take it's not that was the funds that we call from the security or not just the asset not being used to pay that if it's there not that it must be used to pay benefits for all beneficiaries of the plan it's that as a matter of our future obligations we can use them just to provide are specific to just cash right can tell you that here if an employer paid too much into a castro or as it happens on an annual basis we adjust the amount of security as your new changes it will we will reduce the amount or think close to letter credit they can post a bonding obligations not just the co op but reclamation bonds and other obligations associated with these entities the difference here is that the security that it purchaser or its successor to the purchaser of magnum had posted had been done pursuant to the private party agreements that it had it was responsible for providing that security and it did i'm not sure i understand the distinction between the two things that are being discussed which is one you could have in some way assume the letter of credit that patriot already had and the nd would be that that letter of credit goes away then you supply a new letter of credit either way it's a letter  bankruptcy we informed the plan that we would take over that liability they didn't say anything about a letter of credit to them all we knew was that a month or two later they foreclose on the letter of credit and in the briefs they say they had a good usury obligation to do so because we weren't a party to that letter of credit patriot head arrange for it on behalf of those signatory companies and a letter of credit said that the plant can take the letter of credit if those operators seek to provide benefits and they did but what what part missed by the plane or what the plane is causing over is the fact that we  immediately because we also have a statutory duty to provide benefits we took the beneficiaries on because we're related that's the only reason we took them on is because when you notified the plant and we noticed by their plan or they never paid a dollar for these people to those retirees in other words you don't have to worry about it they're not coming in to your plan we're taking them home so they join several liability works both ways if we have a joint and several o as a related person because that's the source of the legal obligation in the st instance is because we don't have we didn't play the people but congress said for these are the patients these specified obligations you're secondarily li it sheds some light on it usually when there's a bankruptcy the parent goes down as well as happened in the paper in bankruptcy the parent liquidated as well so even with co companies usually when a letter of credit has been provided all of the responsible entities are liquidated and the beneficiaries come into the plan and the plane takes the security it happened as happened with a number of bankruptcies in recent years that are very heavy cover a common culture and history so this case is actually on usual because in this instance the entities that went bankrupt provides you the same security that you have to the letter of credit because you get to take in those beneficiaries and if you take them then then use that cash to provide your benefits so that's that's that's not an option  taking them out right you're still we're on the hook that's correct it will be on the book as long as they live and as long as archie exists so in effect the planet has taken a windfall and they're using it for a purpose the beneficiaries and the beneficiaries are what provide them with the aid of that but allocating the money to the premiums or for security for which you're responsible  and their own plane document says that they receive security from its status as security converting into a plan that's it when they enroll beneficiaries and they haven't