A year ago, Peabody Energy Corp.’s chief executive was presiding over $2 billion of losses as the world’s largest private sector coal miner spiraled into bankruptcy.
Now, CEO Glenn Kellow and other top executives stand to reap tens of millions of dollars in stock bonuses under Peabody’s bankruptcy exit plan, which sets aside 10 percent of newly minted shares for employees. The executives would collect a big portion of that stock when the company exits bankruptcy, expected in April. The shares would be worth about $15 million for Kellow and between $3 million and $5 million for each of five other executives, according to a company estimate.
But some shareholders and creditors who are challenging Peabody in bankruptcy court say the executives could reap a much bigger windfall. That’s because Peabody’s estimate severely undervalues the stock, they argue.
The company’s valuation, they contend, fails to properly reflect the impact of President Donald Trump’s unexpected election victory and regulatory changes in Beijing that have stoked demand for coal in China.
Some shareholders and creditors are expected to oppose Peabody’s Chapter 11 exit plan when the company seeks approval from the U.S. Bankruptcy Court in St. Louis in March.
Read more: St. Louis Post-Dispatch