UPDATE: Patriot Coal Corporation Files Chapter 11 Bankruptcy - WBOY.com: Clarksburg, Morgantown: News, Sports, Weather

UPDATE: Patriot Coal Corporation Files Chapter 11 Bankruptcy

Posted: Updated:

UPDATE:

 

A bankruptcy court has granted Patriot Coal interim approval of its $802 million Debtor-in-Possession (DIP) financing, one day after Patriot announced that it had filed a voluntary petition for Chapter 11 Bankruptcy.

A news release on Patriot's website also said the bankruptcy court has granted interim authorization for the company to continue to pay wages and provide health care and other benefits to employees, use existing cash management systems, and take certain other actions to help ensure that its mining operations and customer shipments continue in the ordinary course. 

 

ORIGINAL STORY:

Patriot Coal Corporation announced Monday that it has filed voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the Southern District of New York, according to a news release from Patriot Coal Corporation.

Patriot officials said it has taken this action in order to undertake a comprehensive financial restructuring and said it expects its mining operations and customer shipments to continue in the ordinary course throughout the reorganization process.

"The coal industry is undergoing a major transformation and Patriot's existing capital structure prevents it from making the necessary adjustments to achieve long-term success," said Patriot Chairman and Chief Executive Officer Irl F. Engelhardt. "Our objective is to use the reorganization process to address important issues in an orderly way and make the Company stronger and more competitive."

Patriot has obtained a commitment for $802 million in debtor-in-possession financing from Citigroup Global Markets Inc., Barclays Bank PLC, and Merrill Lynch, Pierce, Fenner & Smith Incorporated as joint lead arrangers, according to the news release.

The new financing and cash generated from Patriot's ongoing operations will be used to support the business during the reorganization process, upon approval by the Bankruptcy Court, officials said.

On Tuesday, United Mine Workers of America International President Cecil E. Roberts issued the following statement:

"The bankruptcy filing by Patriot Coal and its subsidiaries is yet one more piece of mounting bad news for people throughout the coalfields whose lives and whose communities are dependent on coal production. But it is important for UMWA members working at Patriot operations to understand that the company is not shutting down, and that their pay and benefits will not be affected by this filing. As we enter into this unsettled period at Patriot, let me make it clear that our first priority is our members, whether they be actively working or retired, and their families. We are prepared to work with the company to see to it that the wages and benefits these members have earned through their sweat and blood will continue to be paid."

For more information, visit Patriot's website at www.patriotcoal.com or call Patriot's Restructuring Hotline at 877-600-6531.

Court filings and other documents related to the reorganization proceedings are available on a separate website administered by Patriot's claims agent, the Garden City Group, at www.PatriotCaseInfo.com.