Peabody Asks Bankruptcy Court to Extend Deadline of Bankruptcy Exit

by San Antonio Attorney

Peabody Energy is seeking to get one more month to tie up its bankruptcy exit, the company said on Oct. 11.

The agreement made between the company and its lenders would give them more time to submit a reorganization plan until Dec. 14.  The initial deadline was Nov. 9.  The deal is subject to a court approval.

There are three coal energy operators in Wyoming that filed for bankruptcy in 2015.  Peabody is one of them, and the last to make official an exit plan and leave Chapter 11 protection.  Alpha Natural Resources came out last the summer with its mines in Wyoming acquired by Contura Energy.  Arch Coal completed bankruptcy in Oct. 5.

The two companies agreed to change self-bonds, a contentious process of securing cleanup expenses based on the potency of a company’s financial status.

Peabody chose not to trail in the footsteps of Arch and Alpha, in spite of disapproval from environmentalists in the state who want the method of self-bonding to discontinue.  Based on a September update, Peabody Energy’s cleanup duties are worth $727 million, which are partly self-bonded.  Recently, Peabody entered a deal with four states, including Wyoming, giving top priority on the expenses of reclamation to the states with a specified limit.  That deal is going to take effect within the period of the bankruptcy process.

Once the Peabody’s reorganization plan is submitted, the coal company expects to get a court approval before Jan. 31.

The extension of deadline still follows Peabody’s pledge to emerge from bankruptcy within a year.  The company filed for bankruptcy on April 13.

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