Patriot Coal Settles With Peabody

Patriot Coal Corp. has entered into settlement claims with both Peabody Energy, a development that could help the company emerge from bankruptcy by the end of the year. Patriot and Peabody have been battling in court over who must fund benefits for about 3,100 retirees that Peabody agreed to continue covering after its spinoff of Patriot Coal as an independent company in 2007. Patriot will receive $250 million in capital from Knightshead Capital Management, which is sponsoring Patriot’s emergence from bankruptcy. Peabody will provide $310 million to help provide healthcare coverage for the retirees. Peabody will also provide $140 million in letters of credit to Patriot, which also settled with Arch Coal.

The final agreements with both Peabody and Arch are expected to be signed in the coming weeks and presented to the court for approval at Patriot’s Nov. 6 hearing.

Read more in the St. Louis Business Journal

 


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