Patriot Coal Corporation (fka PCXCQ)

[marayatano]

Patriot, salaried retirees agree on benefit changes
Apr 23, 2013, 2:11pm CDT Updated: Apr 23, 2013, 5:44pm CDT


Greta Weiderman
Reporter- St. Louis Business Journal


Patriot Coal and The Salaried Retiree Committee have agreed to modify and terminate certain benefits for non-union retirees of Patriot.

During a hearing Tuesday morning in U.S. Bankruptcy Court in St. Louis, Patriot Coal officials presented an agreed-upon proposed order to Judge Kathy Surratt-States.

According to the proposed order, Patriot will provide benefits to its non-union, salaried retirees through July 31, establish a Voluntary Employee Beneficiary Association (VEBA) Trust for the retirees and provide $250,000 for it, and cap the maximum benefit of the retirees’ life insurance at $30,000.

If Patriot Coal reorganizes into a new company, $3.75 million in shares of equity of the reorganized Patriot will be contributed to the VEBA.

Also at Tuesday morning’s hearing, lawyers representing Patriot Coal and Peabody Energy presented arguments about how many documents Peabody Energy should be required to provide Patriot in the discovery process.

The discussion hinged on restoring back-up tapes of emails and the search for non-email electronic documents.

"The bankruptcy court today shared our view that the full scope of the information requests was unreasonable," Peabody Energy spokesman Vic Svec said in a statement. "We are pleased that the court has ordered this process to proceed on more reasonable grounds."

Patriot and its creditors’ committee asked the court in early April to allow it to investigate Patriot’s 2007 spinoff from Peabody Energy, claiming Patriot was saddled with $600 million in health care and environmental liabilities in the deal.

Peabody filed an objection April 16 to Patriot Coal’s proposal to investigate its 2007 spinoff from Peabody, arguing that Peabody should not be required to provide Patriot with all of the documents it was requesting.

(Page 2 of 2)

"We also believe that any claims the debtors might bring against Peabody Energy in relation to the launch of Patriot Coal would be without merit and we will vigorously defend against them in court," Svec said in a statement.

Patriot filed for Chapter 11 bankruptcy protection in July last year. Patriot assumed most of its legacy liabilities when it was spun off from Peabody Energy in 2007, and also acquired retiree liabilities when it bought Magnum Coal in 2008. Magnum had purchased certain assets that were at one time owned by Arch Coal, also based in St. Louis.

Patriot Coal (OTC: PCXCQ), led by CEO Ben Hatfield, reported a net loss of $730.6 million last year on $1.92 billion in revenue.

www.bizjournals.com/stlouis/blog/2013/04/patriot-salaried-retirees-agree-on.html