Four bondholders sue Peabody Energy, hedge funds over stock sale

Four individual investors of Peabody Energy Corp. are accusing the company, certain hedge funds and other parties involved in the coal producer’s Chapter 11 bankruptcy of breaching their fiduciary duties, according to a lawsuit filed on Thursday.

The four investors, who hold senior unsecured bonds of Peabody, the largest U.S. coal miner, have alleged during the Chapter 11 proceedings that they have been unfairly treated under the reorganization plan.

Peabody spokesman Vic Svec said on Thursday that the company stands by its reorganization plan.

In the lawsuit, filed with the U.S. Bankruptcy Court in St. Louis, the investors also named as defendants the trustees of their bonds and the Chapter 11 committee that represents their interests.

The four investors, who filed their lawsuit strictly on their own behalf, requested a jury trial to address their complaints.

Peabody will ask U.S. Bankruptcy Judge Barry Schermer of St. Louis to approve its plan to exit bankruptcy, which has wide support from other creditors, on March 16.

Read more: St. Louis Post-Dispatch

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