Peabody Energy filed with the U.S. Bankruptcy Court a notice of settlement with the United Mine Workers of America 1974 Pension Plan and Trust.
According to documents filed with the Court, “On October 29, 2015, the 1974 Plan served a Notice and Demand for withdrawal liability on PEC and Peabody Holding Company, LLC (together with PEC, the ‘Defendants’) in the amount of $644,213,301.74 on the grounds that a principal purpose of the Defendants’ spinoff of Patriot Coal Corporation in 2007 was to evade or avoid withdrawal liability and therefore that spinoff transaction was disregarded pursuant to ERISA § 4212(c), the ‘Demand’….On August 15, 2016, the 1974 Plan filed Claim No. 4722 in the Bankruptcy Case pertaining to the Demand in the amount of $642,657,881.00 jointly and severally against each of the Debtors, the ‘Claim’.”
In addition, “The Plan or any Permitted Plan shall classify the Claim in Class 7 against every Debtor Group in the amount of $75,000,000, which shall be an allowed claim, the ‘Allowed Claim’….Under no circumstances shall the 1974 Plan receive more than $75,000,000, absent a breach of this Settlement Agreement as governed by Section 21 herein. This Settlement Agreement shall automatically terminate, and shall have no further force or effect, if the Bankruptcy Court refuses to approve this Settlement Agreement or if the Plan Effective Date has not occurred by October 13, 2017.”
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