Bankrupt Patriot Coal seeks end to retiree health care plansReprints
(Reuters) — Bankrupt Patriot Coal Corp. asked a U.S. judge to allow it to end its obligation for retiree health care for its nonunion employees, saying no potential buyer of its assets would agree to take on the cost.
The company filed for Chapter 11 bankruptcy in May, its second in three years, due to plunging prices for its coal and tighter regulations.
The company began an auction on Monday for the bulk of its assets, which includes mines in West Virginia and reserves in other states. Patriot has not said if the private auction had concluded.
“No purchaser of the debtors’ assets is willing to assume these obligations,” the company said in a filing late Monday with the U.S. Bankruptcy Court in Richmond, Virginia. “The debtors will lose the ability to fund their operating expenses much less any other obligations such as retiree related expenses within a matter of weeks.”
Patriot has 969 nonunion retirees who would be affected by the request.
The company proposed transferring some retirees to a union-linked benefit trust, but many would only receive an unsecured claim in the bankruptcy, which is likely to have little value.
The company said it would contribute $3 million to the benefit trust and $1 million to an official committee of retirees.
Patriot has already asked the U.S. Bankruptcy Judge Keith Phillips to allow it to reject its collective bargaining agreement with the United Mine Workers of America.