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Peabody Presses Case That Would Excuse It From Honoring Retiree Benefits

November 09, 2015

Jacob Barker for the St. Louis Post-Dispatch:

Patriot Coal assumed responsibility for thousands of Peabody Energy retirees in Appalachia and the coal-rich Illinois Basin after Peabody spun it off in 2007. Two years ago, Patriot concluded its first bankruptcy in St. Louis with a deal to reduce its health care and pension obligations to retirees.

The deal committed Peabody to paying about $310 million toward a special trust for retiree health claims. Patriot committed about $90 million to the trust, known as a Voluntary Employees’ Beneficiary Association, or VEBA.

But after Patriot filed its second bankruptcy this year in Richmond, Va., this time to sell itself off in pieces rather than reorganize, Peabody argued it was no longer on the hook for the remaining $145 million it promised to the Patriot VEBA.

The reason: The Virginia bankruptcy court allowed Patriot to get out of making payments to the VEBA. Peabody, in court filings, said that made its agreement with Patriot void. Patriot’s bankruptcy plan was confirmed by the court last week.

Peabody retirees again face loss of benefits

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