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
  • Sunflower 1 Unique sunflower

    July 28, 2014 2 Photos

  • How much will annexation cost?

    City of Beckley officials say annexation would provide many benefits to outlying residents, but exactly how much would annexation cost?

    July 28, 2014

  • Not in my backyard: U.S. sending fossil fuel abroad

    As the Obama administration weans the U.S. off dirty fuels blamed for global warming, energy companies have been sending more of America’s unwanted energy leftovers to other parts of the world where they could create even more pollution.

    July 28, 2014

  • Greenbrier PSD officials worried about State Fair tunnel project

    Plans to raise a section of U.S. 219 and construct a tunnel underneath for the passage of State Fair pedestrians provided a hot topic for discussion at Friday’s meeting of the Greenbrier Public Service District No. 1 board.

    July 28, 2014

  • Beckley man places second in three-day world horseshoe tourney in Buffalo, N.Y.

    One Beckley man knows a thing or two about pitching a horseshoe. He’s been throwing for decades and he’s been to a handful of world tournaments. Recently he placed second in the 2014 World Horseshoe Pitching Tournament.

    July 28, 2014

  • saints garb new Saintly garb

    July 27, 2014 1 Photo

  • tunnel flow Tunnel reopens after fire

    Traffic on Interstate 77 was still backed up about 14 miles in Bland County, Va., Saturday evening, but the Virginia Department of Transportation reported at about 6 p.m. that both northbound lanes of I-77 through East River Mountain were open to traffic.

    July 27, 2014 2 Photos

  • tunnel firefighters Bluefield firefighters first ones on the scene

    Lights in the southern end of the tunnel illuminate an odd design beside the catwalk near the left lane of the northbound tube of the East River Mountain Tunnel that transports I-77 from Virginia into West Virginia. Two firefighters who made the initial assault through the total darkness of the soot and smoke-filled tunnel left those marks as they slid their arms along the catwalk wall on their journey back to the light.

    July 27, 2014 2 Photos

  • Internet service providers talk shop at Broadband Summit

    Call it the Internet 101.

    West Virginia’s Internet service providers, with the help of Mike Holstine, explained how end-users in homes and businesses get the Internet, how and why they use it and the benefits of having high-speed Internet for everybody. 

     

    July 27, 2014

  • tunnel Fire closes I-77 for hours

    East River Mountain Tunnel was engulfed in a cloud of black smoke Friday as a result of a tractor-trailer fire inside the tunnel that ignited just after 3 p.m.

    July 26, 2014 1 Photo