VIDEO: Patriot Coal again files for Chapter 11 bankruptcy
Patriot said it is involved in active negotiations for the sale of its operating assets to a strategic partner
CHARLESTON, W.Va. (AP) — Patriot Coal Corp. filed for Chapter 11 bankruptcy protection Tuesday for the second time in three years.
The company made the filing in U.S. Bankruptcy Court for the Eastern District of Virginia. It had emerged from an earlier bankruptcy case in December 2013 in Missouri.
Patriot said it is involved in active negotiations for the sale of its operating assets to a strategic partner.
Patriot said it will continue shipping and mining operations and it has received a commitment for $100 million in debt financing from secured debt holders that it did not identify.
"In light of the challenging market conditions, and after a comprehensive review of our alternatives, the board and management team have determined that this process represents the best path forward for Patriot and its stakeholders," Patriot President and Chief Executive Officer Bob Bennett said in a statement.
Patriot has eight active mining complexes in West Virginia. It is based in Scott Depot and employs about 2,900 people. The bankruptcy filing lists both the company's estimated assets and liabilities at more than $1 billion.
Coal-mining companies in central Appalachia have struggled in recent years, shedding jobs amid low natural gas prices, dwindling coal seams, competition from other states and weaker market conditions. U.S. utilities and other companies have been switching to cheap natural gas from coal to generate electricity.
United Mine Workers of America spokesman Phil Smith said the union was reviewing the filing and declined immediate comment.
In 2013, a New York bankruptcy judge approved an $802 million financing package so Patriot could continue operating while it restructured.
That reorganization plan was approved three months later in Missouri after Patriot settled with former corporate parent Peabody Energy Corp. following months of legal tangling over retiree health benefits. Under that deal, Peabody, which spun off Patriot in 2007, was to spend $310 million over four years to fund the benefits and provide about $140 million in letters of credit to Patriot.
During that restructuring, an 8th U.S. Court of Appeals bankruptcy panel reversed a U.S. bankruptcy judge's ruled that had said Peabody wasn't obligated to continue health care benefits for some 3,100 retirees.