May 12, 2015 / 2:08 PM / 2 years ago

UPDATE 2-Patriot Coal files Chapter 11 again, is in talks with buyer

3 Min Read

(Adds mine workers' statement, background, paragraphs 8-10)

By Tom Hals

May 12 (Reuters) - Patriot Coal Corp filed for bankruptcy protection on Tuesday, just 18 months after emerging from its previous Chapter 11, and said it was in negotiations with a potential buyer.

The Scott Depot, West Virginia-based company said it was suffering because of low energy prices.

To support its mining and marketing operations during the bankruptcy, Patriot has a commitment from its current secured creditors to provide up to $100 million in financing.

The company emerged from its previous Chapter 11 bankruptcy in December 2013 after filing in July 2012.

"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 Officer Bob Bennett said in a statement.

The company listed assets and liabilities of more than $1 billion in its bankruptcy petition, which it filed in the U.S. Bankruptcy Court in the Eastern District of Virginia. It has eight active mining complexes in northern and central Appalachia.

Patriot has reported 1.4 billion tons of proven and probable coal reserves.

Patriot emerged from its previous bankruptcy after agreeing with its former parent Peabody Energy to provide $400 million paid over several years to cover future health care benefits for retired mine workers. In return, the mine workers relinquished a 35 percent stake in Patriot.

The impact on that settlement from Tuesday's bankruptcy was unclear, but mine workers said in a statement they had hired lawyers and advisors to protect their benefits.

"We remain just as committed to fighting for our retirees' health care and pension benefits as we were in the last bankruptcy," Cecil Roberts, president of the United Mine Workers of America, said in a statement.

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. Patriot joins other energy-related companies that have filed for bankruptcy this year, including Xinergy Ltd, Dune Energy Inc, BPZ Energy Inc and Quicksilver Resources Inc.

Coal producer Walter Energy Inc skipped an April interest payment on its senior secured notes. A grace period on that payment expires on Friday.

The case is Patriot Coal Corp, U.S. Bankruptcy Court, Eastern District of Virginia, No. 15-32450. (Reporting by Tom Hals in Wilmington, Delaware, and Amrutha Gayathri in Bengaluru; Editing by Savio D'Souza, Lisa Von Ahn, Grant McCool)

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