Peabody Executives Could Be Given Incentive Bonuses within the Bankruptcy Duration

by San Antonio Attorney

Six executives of Peabody Energy could get bonuses from the company, which filed for bankruptcy and had lay off 235 workers in March.  The total amount of incentives is about $12 million.

Peabody Energy, which is headquartered in Missouri, asserted in court papers filed on Aug.  3 that the executive bonuses, conditional on reducing costs, along with environmental reclamation and attaining revenue targets, is going to increase Peabody’s viability.

That argument has been used many times and it usually succeeds.

The Eagle Butte and Belle Ayr mines operator, Alpha Natural Resources, Inc., was criticized when the company obtained court approval to provide top executives with millions of dollars in incentives while it is in bankruptcy.

Meanwhile, company’s request was filed in the middle of a dispute in Wyoming over Peabody’s flawed “self-bonding” of its reclamation.

Western Organization of Resource Councils chairman, Bob LeResche, said the company cannot afford to buy surety bonds, but they can afford to provide big incentives to their top executives.  He also mentioned that he is amazed that every bankrupt coal company has done the same thing.

On Aug.  9, the Office of Surface Mining Regulation and Enforcement advised the states to end the self-bonding practice at coal mines because of many high profile bankruptcies and an volatile future for the coal market.

The coal mining regulator recommends that states directly review the coal companies’ financial state, stop their new self-bonds, and require five years operation after leaving bankruptcy before they can self-bond.

The constant, though understated, demands from the federal regulators is a benefit to Western landowners, outdoorsmen and environmentalists who are alarmed that Wyoming lacks properly regulations.

Wyoming has a mining regulatory agency, the Department of Environmental Quality.  The state also has self-bonding deals with surface mines, a federal data showed.

Environmentalists are concerned about the worsening of coal market, resulting in more unpaid reclamation.

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