Credit & Capital

Eighteen Months Later, A Second Bankruptcy

Scott Depot, W.Va.-based energy company Patriot Coal is now in talks with a potential buyer, just a year and a half after emerging from Chapter 11.
Katie Kuehner-HebertMay 12, 2015
Eighteen Months Later, A Second Bankruptcy

Patriot Coal again filed Chapter 11, blaming low energy prices, and is now negotiating with a potential buyer, Reuters said on Tuesday.

The Scott Depot, W.Va.-based company filed for protection in the U.S. Bankruptcy Court in the Eastern District of Virginia, just 18 months after emerging from its previous Chapter 11, according to Reuters.

“In light of the challenging market conditions, and after a comprehensive review of our alternatives, the board and management team have determined that this process represents the best path forward for Patriot and its stakeholders,” Chief Executive Bob Bennett said in a statement.

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Patriot’s current secured creditors have committed up to $100 million in financing to maintain the company’s mining and marketing operations during the bankruptcy, Reuters said. Patriot has eight active mining complexes in northern and central Appalachia, with a reported 1.4 billion tons of proven and probable coal reserves.

“Energy prices have fallen sharply in the past year as U.S. production has boomed and demand from large markets such as China has slowed,” Reuters wrote.

Other energy-related companies that have filed for bankruptcy this year include Xinergy, Dune Energy, BPZ Energy, and Quicksilver Resources. Walter Energy skipped an April interest payment on its senior secured notes, and the grace period on that payment expires on Friday, according to Reuters.