Patriot lodges reorganization plan

LESS than a month after finalizing agreements with the United Mine Workers of America, Patriot Coal has submitted its plan for reorganization.
Patriot lodges reorganization plan Patriot lodges reorganization plan Patriot lodges reorganization plan Patriot lodges reorganization plan Patriot lodges reorganization plan

 

Staff Reporter

Filed in the US Bankruptcy Court for the Eastern District of Missouri, where Judge Kathy Surratt-States is overseeing the case, the 90-page document predominantly consists of procedures, definitions and lists of debtor companies.

Patriot issued a press statement on Friday, stating it “anticipates filing its disclosure statement with the Bankruptcy Court in the next week, which will contain additional details about the proposed plan”

The plan looks like it will pay back secured creditors in cash while cutting recoveries for unsecured creditors, who would be given equity in the restructured Patriot.

In August a long battle between the St Louis-based producer and the UMWA ended with an agreement on wage-and-benefits agreements for some 3000 workers and retirees.

Under the terms of the deal with UMWA, Patriot will give the union a roughly 35% equity stake in the reorganized company, which it can sell to help bolster benefits.

Also included in the deal were wage changes including 50 cents per hour every year from 2015 to 2018, as well as healthcare benefits similar to non-union workers.

Pension benefits have also been maintained for retirees, and active employees will continue earning pension credits.

The agreement will help Patriot save about $130 million annually over the coming four years, more than 85% of the $150 million the company said it would need to save to successfully exit its Chapter 11 bankruptcy proceedings.

"Ratification of these agreements provides labor stability and ensures cost savings essential to Patriot's plan of reorganization," Patriot president and CEO Bennett Hatfield said in an August statement.

“These agreements should set Patriot on a path to emerge from bankruptcy by the end of 2013.”

The reorganization plan is subject to the support of creditors and approval from Surratt-States.

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