Patriot records loss for July

PATRIOT Coal made an operating loss of $US31.9 million for the month ended July 2012 which was struck from revenues of $134.7 million.
Patriot records loss for July Patriot records loss for July Patriot records loss for July Patriot records loss for July Patriot records loss for July

Courtesy Patriot Coal.

Lou Caruana

But the company, which filed for Chapter 11 bankruptcy protection on July 9, still has liabilities subject to compromise of $2.1 billion, which represents unsecured obligations that will be accounted for under a plan of reorganization.

It has received bankruptcy court approval for a $802 million debtor-in-possession finance package.

Post-retirement benefit obligations were the biggest liability subject to compromise at July 31, 2012, at $1.4 billion. This was followed by unsecured debt of $458 million and accounts payable and accruals of $123.2 million.

“Generally, actions to enforce or otherwise affect payment of pre-petition liabilities are stayed,” the company said.

“Accounting Standards Codification (ASC) 852 requires pre-petition liabilities that are subject to compromise to be reported at the amounts expected to be allowed, even if they may be settled for lesser amounts.

“These liabilities represent the amounts expected to be allowed on known or potential claims to be resolved through the Chapter 11 process, and remain subject to future adjustments arising from negotiated settlements, actions of the Bankruptcy Court, rejection of executory contracts and unexpired leases, the determination as to the value of collateral securing the claims, proofs of claim, and other events.”

Liabilities subject to compromise also include certain items that may be assumed under the plan of reorganization and as such may be subsequently reclassified to liabilities not subject to compromise.

“In light of the expected number of creditors, the claims resolutions process may take considerable time to complete. Accordingly, the ultimate amount or treatment of such liabilities is not determinable at this time,” the company said.

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