Peabody Energy Corp. has agreed to pay $75 million to a special trust that pays health benefits for retired Patriot Coal mine workers, ending a dispute that had threatened retiree health benefits for about 12,000 people.
Peabody spun off Patriot in 2007, unloading its mostly higher-costing Appalachian mines and employee obligations on to Patriot. Peabody agreed to contribute to the Voluntary Employees’ Beneficiary Association, or VEBA, in 2013 as part of a Patriot’s restructuring plan during its first bankruptcy.
Peabody, which already contributed $165 million to the VEBA, announced in October that it wouldn’t pay an additional $145 million owed to the trust after Patriot was again forced into bankruptcy earlier this year and later liquidated itself. Filing a motion in the bankruptcy court in St. Louis, Peabody said it shouldn’t have to make those last payments because Patriot’s actions had breached the 2013 agreement.
On Monday, however, Peabody said it agreed to pay of $75 million to the trust in equal monthly installments beginning Monday, subject to approval by the bankruptcy court. The deal nearly halves the amount of money that Peabody had owed.