Peabody Energy has agreed to contribute as much as $75 million this year toward health care benefits for retirees of Patriot Coal, a Peabody spinoff that is now defunct.
The agreement takes the form of a legal settlement between St. Louis-based Peabody and the United Mine Workers of America. Both parties signed off on the agreement and announced the news late Monday.
Under the agreement, Peabody will pay $7.5 million each month from January through October. The money will go into a Voluntary Employees’ Beneficiary Association (VEBA), which helps pay for Patriot retirees’ health care benefits. The agreement covers 12,000 Patriot retirees, dependents and widows, most of whom live in West Virginia, Kentucky, Illinois and Indiana.
“I am pleased that we have been able to reach this agreement,” United Mine Workers President Cecil Roberts said.
Patriot filed for bankruptcy for the first time in 2012. Following that, in 2013 Peabody entered into a three-party agreement with Patriot and the United Mine Workers in which Peabody agreed to pay into a Patriot retirees’ VEBA, contributing $90 million in January 2014 and $75 million in January 2015. Patriot filed for bankruptcy a second time in May 2015 and is no longer in operation.
Under the terms of the current agreement, Peabody’s financial obligation to the Patriot retirees’ VEBA will end after this year, unless pending federal legislation – the Coal Healthcare and Pensions Protection Act of 2015 – passes to provide an alternative form of benefits.
Original Article can be found here