Patriot Coal Corporation (fka PCXCQ)

[marayatano]

Patriot Coal: Miners would lose the most if company liquidates
May 3, 2013, 2:18pm CDT

If the United Mine Workers of America were to strike, Patriot Coal Corp. would liquidate, said Benjamin Kaminetzky, a lawyer with New York-based Davis Polk & Wardell who is representing Patriot in its bankruptcy.

Parties involved in Patriot’s bankruptcy case gave closing arguments Friday in federal court in St. Louis on a motion to change union employees’ and retirees’ benefits.

“If this company fails to get its costs in line, there will be one big loser — the UMWA employees and retirees,” Kaminetzky said during his closing argument.

Also on Friday, the unsecured creditors committee said it supports Patriot’s most recent offer to the UMWA. The committee had previously objected to the offer — a 35 percent equity stake in the reorganized coal company, $15 million in profit sharing, and future proceeds from litigation and royalty payments going to a Voluntary Employee Beneficiary Association Trust — arguing that the equity stake should be lower.

Since Monday, U.S. Bankruptcy Judge Kathy Surratt-States has listened to testimony over Patriot’s motion to modify agreements with the union on wages, benefits and pensions, and change health care benefits for union retirees.

Surratt-States is legally required to rule on the motion within 30 days of April 29, which was the start of the hearing, according to Janine Orf, vice president of investor relations at Patriot Coal.

The company’s ability to successfully reorganize hinges on whether it’s able to make those changes in order to save $150 million a year, according to Patriot CEO Ben Hatfield.

Patriot filed for bankruptcy in July. It assumed most of its legacy liabilities when it was spun off from St. Louis-based Peabody Energy in 2007, and it 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.

http://www.bizjournals.com/stlouis/blog/2013/05/patriot-coal-miners-would-lose-the.html