The Register-Herald, Beckley, West Virginia

Latest News

October 11, 2013

Peabody Energy reaches deal over Patriot retiree benefits

ST. LOUIS — Coal producer Peabody Energy Corp. will pay hundreds of millions of dollars to settle a drawn-out legal dispute over health care benefits for thousands of retirees who worked for bankrupt Peabody spinoff Patriot Coal Corp, the companies announced Thursday.

Under the deal, the world’s biggest private-sector coal producer will spend $310 million over four years to fund retiree benefits and provide about $140 million in letters of credit to Patriot, bolstering Patriot’s hopes of emerging from Chapter 11 bankruptcy by the end of this year. It also requires the United Mine Workers of America to give up most of its recently granted stake in Patriot, which was spun off by Peabody in 2007.

The settlement — pending approval by a federal bankruptcy judge next month — resolves a festering dispute between the St. Louis-based companies that intensified after Patriot filed for bankruptcy last year.

U.S. Bankruptcy Judge Kathy Surratt-States ruled in May that Peabody was not obligated to continue health care benefits for some 3,100 retirees, only to be reversed in August by an 8th U.S. Court of Appeals bankruptcy panel.

Patriot earlier this year sued Peabody, seeking to ensure it didn’t try to use the bankruptcy to avoid the debated health care obligations. Under the settlement, Peabody’s payments will be funneled into a voluntary employee benefit association fund from which benefits to the retirees would be disbursed. Patriot also will contribute $75 million to the fund, plus future payments from royalty and profit-sharing commitments.

“We are pleased to resolve the uncertainty among Patriot retirees by providing substantial funding for the newly established (fund),” Alexander Schoch, a Peabody executive vice president and chief legal officer, said in a statement.

Patriot said separately it also will get a $250 million infusion through a rights offering backstopped by Knighthead Capital Management LLC, saying that will “financially sponsor Patriot’s emergence from bankruptcy.”

“Reaching these agreements represents a pivotal juncture in Patriot’s restructuring,” said Bennett Hatfield, Patriot’s president and CEO. “This sets a clear path forward for Patriot to emerge from Chapter 11 by year-end as a strong competitor in the coal industry.”

The settlement also calls for the miners’ union to give up nearly all of its 35-percent stake in Patriot that resulted from Surratt-States’ May ruling. The union, which has argued that Peabody spun off Patriot and set that company up to fail in a deliberate plan to end benefit obligations to the retirees, said it will halt its months of protests targeting Peabody.

Saying he’s “very pleased” by the settlement, the United Mine Workers’ international president, Cecil Roberts, called the negotiated payouts “a significant amount of money that will help maintain health care for thousands of retirees who earned those benefits though years of labor in America’s coal mines.”

Peabody shares rose 15 cents to $17.10 in trading Thursday.

1
Text Only
Latest News
  • Rahall raises $324k in WVa’s 3rd; Jenkins, $194k

    Democrat U.S. Rep. Nick Rahall raised almost $324,000 last quarter for his contested re-election bid, while GOP challenger Evan Jenkins banked about $193,500.

    April 16, 2014

  • State regional jails ban touching during visits

    Concerns about drug contraband have prompted a ban on regional jail inmates touching loved ones during supervised contact visits.

    April 16, 2014

  • Renew W.Va. car registration online

    State residents strapped for time got a break Tuesday when Gov. Earl Ray Tomblin and Acting Division of Motor Vehicles Director Steve Dale announced new DMV online options for renewing vehicle registration.

    April 16, 2014

  • Manchin says mines should speak out about coal

    The Democratic senator leading the battle against the White House’s strategy to fight climate change urged the mining industry on Tuesday to speak out about coal’s role in providing affordable, reliable electricity to the country to help combat strict new emissions rules for coal-fired power plants.

    April 16, 2014

  • Rainelle Town Council pulls plans to annex roads

    Residents of several communities in Greenbrier County can rest assured they won’t be affected by a proposed road annexation after Rainelle Town Council decided not to move forward with the plan.

    April 16, 2014

  • City and county code enforcement offices separate

    After 10 years of partnership, the City of Beckley and the Raleigh County Code Enforcement offices have decided to part ways.
    Mayor Bill O’Brien said after several meetings with county commissioners, the groups decided to separate.

    April 16, 2014

  • snowywalk April is the cruelest month

    April 16, 2014 1 Photo

  • eggy All mine!

    April 16, 2014 1 Photo

  • Manchin urges mines to speak out about coal

    The Democratic senator leading the battle against the White House’s strategy to fight climate change urged the mining industry on Tuesday to speak out about coal’s role in providing affordable, reliable electricity to the country to help combat strict new emissions rules for coal-fired power plants.

    April 15, 2014

  • State jobless rate inches up in March

    West Virginia’s unemployment rate inched up in March to 6.1 percent.

    April 15, 2014