An emergency appeal has been filed opposing Peabody Energy Corp.’s bankruptcy reorganization plan, alleging the proposal violates U.S. bankruptcy law by prematurely forcing creditors to approve the plan.
The opponents’ complaints focus on the terms of a $1.5 billion private recapitalization that is part of the reorganization. To sign up for the private offering, creditors had to support Peabody’s complex reorganization plan within days of its publication Dec. 22, Reuters reports.
The plan was approved by U.S. Bankruptcy Judge Barry Schermer on Jan. 26, but an ad hoc committee of dissenting creditors filed an appeal with the U.S. Court of Appeals for the Eighth Circuit on Friday, claiming Peabody “improperly” forced creditors to vote in favor of the plan before it received court approval, the news service reports.
St. Louis-based Peabody Energy Corp. filed for bankruptcy in April 2016 and hopes to emerge in the second quarter this year.