ST. LOUIS — A New York district court granted St. Louis-based Patriot Coal Corporation interim approval of $802 million Debtor-In-Possession financing.
The financing is backed by Citigroup Global Markets Inc., Barclays Bank PLC, and Merrill Lynch, Pierce, Fenner & Smith Inc. The court approved immediate access to$677 million, which will help Patriot continue to pay its suppliers, employees and other expenses during the reorganization process.
Patriot, a spin-off of another St. Louis coal company, Peabody Energy, filed for Chapter 11 bankruptcy protection on Monday, having lost billions of dollars in value after a warm winter and declining demand for coal.
Patriot was spun off from Peabody in 2007, but Peabody may still be responsible for some of Patriot’s liabilities, should Patriot be unable to pay, according to a Bloomberg report from Tuesday. Specifically, Peabody may be on the hook for up to $150 million in medical treatments for black lung disease for its workers.