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Arguments continue over Patriot bankruptcy location

WHILE the US trustee and industry union United Mine Workers of America may want the Chapter 11 ba...

Donna Schmidt
Arguments continue over Patriot bankruptcy location

According to a Bloomberg report, Patriot’s bankruptcy lenders, creditors and even the company itself are opposing pushes to move the case from the US Bankruptcy Court of the Southern District of New York (Manhattan), where proceedings have begun, to the Southern District of West Virginia.

The UMWA and several insurers have said the West Virginia move would be more convenient and be more economical.

“The UMWA asserts that Charleston is more convenient for the workers and retirees it represents – a goal that is praiseworthy, but should not control the venue analysis,” the creditors said this week.

Patriot, a Peabody Energy spin-off company, filed for bankruptcy in July.

Last week, the US Justice Department joined the fight for a case move, claiming the producer created two business units just weeks before its filing for the sole purpose of avoiding other bankruptcy courts.

Patriot’s argument, Bloomberg said, was that New York was the most convenient and cost-effective location, and that none of its top five secured creditors were located in West Virginia.

Additionally, the company’s advisers and involved parties had New York offices.

“Moreover, flights to and from Charleston, West Virginia, are often exceedingly expensive,” the news service reported of a company statement, adding that a refundable, round-trip ticket can cost upwards of $US2200.

Patriot filed for bankruptcy protection on July 9 and has since received bankruptcy court approval for a $802 million debtor-in-possession finance package.

The company blamed cancelled contracts, rising costs and plummeting coal prices for its woes. It tried reducing production, but that proved unsuccessful.

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