Patriot Coal: court OKs deal to assign coal reserve interests, sell property

By Lisa Kerner

Charlotte, N.C., Nov. 19 - Patriot Coal Corp.'s request for court approval to enter into an agreement with Alliance Resource Properties, LLC and Alliance Resource Partners, LP to assign lease interests and sell property was approved on Tuesday by U.S. Bankruptcy Court for the Eastern District of Missouri, according to an attorney familiar with the case.

As previously reported, Patriot Coal entered into an agreement under which the company will convey its interests in surplus owned and leased coal reserves in Western Kentucky to the Alliance entities for $6.5 million of up-front cash consideration along with future royalty payments.

The company said the transaction will provide an estimated $11.1 million to $15 million in total value on a discounted basis.

In addition, Patriot Coal said it is not profitable or practical for it to mine the coal reserves being sold under the Alliance transaction and it is unable to mine the coal on some properties as a result of geological constraints.

Patriot Coal, a St. Louis-based miner, producer and seller of thermal coal, filed for bankruptcy on July 9, 2012 in the U.S. Bankruptcy Court for the Southern District of New York. The case was transferred to the U.S. Bankruptcy Court for the Eastern District of Missouri under Chapter 11 case number 12-51502.

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