Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Creditors Set To Vote On Patriot Coal Bankruptcy Exit Plan
Author: Joel R. Glucksman
Date: November 19, 2013
Key Contacts
Back
Patriot Coal Corp. announced that it is currently on pace to emerge from protection under Chapter 11 of the bankruptcy law by the end of the year. The announcement follows a U.S. Bankruptcy Court’s ruling approving the company’s disclosure statement and allowing the company to solicit votes from its various classes on creditors on the approval of its proposed plan of reorganization.
In the recent ruling, the U.S. Bankruptcy Court for the Eastern District of Missouri confirmed that the company’s proposed disclosure statement contained the necessary information needed to solicit votes from the creditors, and also affirmed that the company may move forward with its proposed rights offering. Further, the court approved an agreement among Patriot Coal, Barclays Bank, and Deutsche Bank, under which the financial institutions will provide $576 million in exit financing and post-emergence credit.
The court’s ruling was viewed as a major milestone in Patriot’s long-awaited exit from bankruptcy, following months of wrangling with union employees in disputes that included worker strikes, lengthy negotiations, and cost-cutting measures. Earlier in the year, the court gave the company permission to dissolve collective bargaining agreements and drastically cut worker benefits. Under the coal company’s proposed plan, retiree benefits will be reduced, and existing employees may face cuts in salary, vacation time, and other benefits. Additionally, the company will no longer directly manage employee health benefits, which will instead be transferred to an outside trust, according to Reuters.
“Today’s actions by the court represent important milestones on Patriot’s path to emergence as a strong, well-capitalized competitor in the coal industry,” said Patriot president and CEO Bennett Hatfield. “Taken together, the Rights Offering and the settlements with Peabody and Arch lay the foundation for completion of our exit financing in the next few weeks. We remain on schedule for emergence from bankruptcy in mid to late December.”
The agreement also allows for a rights offering backstopped by Knighthead Capital Management, which is expected to raise roughly $250 million in new capital.
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Does Your Homeowners Insurance Provide Adequate Coverage?
Your home is likely your greatest asset, which is why it is so important to adequately protect it. Homeowners insurance protects you from the financial costs of unforeseen losses, such as theft, fire, and natural disasters, by helping you rebuild and replace possessions that were lost While the definition of “adequate” coverage depends upon a […]
Author: Jesse M. Dimitro
Understanding the Importance of a Non-Contingent Offer
Making a non-contingent offer can dramatically increase your chances of securing a real estate transaction, particularly in competitive markets like New York City. However, buyers should understand that waiving contingencies, including those related to financing, or appraisals, also comes with significant risks. Determining your best strategy requires careful analysis of the property, the market, and […]
Author: Jesse M. Dimitro
Fred D. Zemel Appointed Chair of Strategic Planning at Scarinci & Hollenbeck, LLC
Business Transactional Attorney Zemel to Spearhead Strategic Initiatives for Continued Growth and Innovation Little Falls, NJ – February 21, 2025 – Scarinci & Hollenbeck, LLC is pleased to announce that Partner Fred D. Zemel has been named Chair of the firm’s Strategic Planning Committee. In this role, Mr. Zemel will lead the committee in identifying, […]
Author: Scarinci Hollenbeck, LLC
Novation Agreement Process: Step-by-Step Guide for Businesses
Big changes sometimes occur during the life cycle of a contract. Cancelling a contract outright can be bad for your reputation and your bottom line. Businesses need to know how to best address a change in circumstances, while also protecting their legal rights. One option is to transfer the “benefits and the burdens” of a […]
Author: Dan Brecher
What Is a Trade Secret? Key Elements and Legal Protections Explained
What is a trade secret and why you you protect them? Technology has made trade secret theft even easier and more prevalent. In fact, businesses lose billions of dollars every year due to trade secret theft committed by employees, competitors, and even foreign governments. But what is a trade secret? And how do you protect […]
Author: Ronald S. Bienstock
What Is Title Insurance? Safeguarding Against Title Defects
If you are considering the purchase of a property, you may wonder — what is title insurance, do I need it, and why do I need it? Even seasoned property owners may question if the added expense and extra paperwork is really necessary, especially considering that people and entities insured by title insurance make fewer […]
Author: Patrick T. Conlon
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Creditors Set To Vote On Patriot Coal Bankruptcy Exit Plan
Author: Joel R. Glucksman
Patriot Coal Corp. announced that it is currently on pace to emerge from protection under Chapter 11 of the bankruptcy law by the end of the year. The announcement follows a U.S. Bankruptcy Court’s ruling approving the company’s disclosure statement and allowing the company to solicit votes from its various classes on creditors on the approval of its proposed plan of reorganization.
In the recent ruling, the U.S. Bankruptcy Court for the Eastern District of Missouri confirmed that the company’s proposed disclosure statement contained the necessary information needed to solicit votes from the creditors, and also affirmed that the company may move forward with its proposed rights offering. Further, the court approved an agreement among Patriot Coal, Barclays Bank, and Deutsche Bank, under which the financial institutions will provide $576 million in exit financing and post-emergence credit.
The court’s ruling was viewed as a major milestone in Patriot’s long-awaited exit from bankruptcy, following months of wrangling with union employees in disputes that included worker strikes, lengthy negotiations, and cost-cutting measures. Earlier in the year, the court gave the company permission to dissolve collective bargaining agreements and drastically cut worker benefits. Under the coal company’s proposed plan, retiree benefits will be reduced, and existing employees may face cuts in salary, vacation time, and other benefits. Additionally, the company will no longer directly manage employee health benefits, which will instead be transferred to an outside trust, according to Reuters.
“Today’s actions by the court represent important milestones on Patriot’s path to emergence as a strong, well-capitalized competitor in the coal industry,” said Patriot president and CEO Bennett Hatfield. “Taken together, the Rights Offering and the settlements with Peabody and Arch lay the foundation for completion of our exit financing in the next few weeks. We remain on schedule for emergence from bankruptcy in mid to late December.”
The agreement also allows for a rights offering backstopped by Knighthead Capital Management, which is expected to raise roughly $250 million in new capital.