Coal news: Judge says he'll sign off on Patriot Coal asset sale

Associated Press

Coal news: Judge says he'll sign off on Patriot Coal asset sale

RICHMOND, Va. (AP) — A bankruptcy judge has told Patriot Coal that it can sell its remaining assets at auction.

U.S. Bankruptcy Judge Keith Phillips said on Monday at a hearing in Richmond that he would sign off on Patriot holding an auction on Sept. 9. The bidding would be led off by the Virginia Conservation Legacy Fund, The Wall Street Journal (http://on.wsj.com/1N07kVb) reported.

Patriot announced in August that it planned to sell some assets to ERP Compliant Fuels LLC, an affiliate of the Virginia nonprofit. The assets include the Federal Mining Complex in northern West Virginia. The nonprofit also would acquire other mining permits for purposes of water quality improvement and reclamation.

Lexington, Kentucky-based Blackhawk Mining announced in June that it planned to acquire the majority of Patriot's mining operations. Rival bids are due Friday.

Patriot has asked Phillips to reject its collective bargaining agreement with the United Mine Workers of America and change retirees' health benefits. A hearing on the company's request was scheduled Tuesday.

Scott Depot, West Virginia-based Patriot filed for Chapter 11 bankruptcy protection on May 12. It was the coal operator's second bankruptcy filing in three years. Patriot had emerged from an earlier bankruptcy case in Missouri in December 2013.

Patriot was formed as a spinoff from the Appalachian operations of former corporate parent Peabody Energy Corp. in 2007.

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.

Alpha Natural Resources filed for Chapter 11 protection in early August.

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