Latest News 2012 August Patriot Bankruptcy Sparks Conflict with Creditors

Patriot Bankruptcy Sparks Conflict with Creditors

According to an article in Bloomberg, the Patriot Coal Corporation and bankruptcy lenders oppose transferring the case to West Virginia, instead of leaving it in New York. Yet Unions, insurers, and the US government want the case moved as soon as possible. The United Mine Workers union and several insurers who have argued for the move haven’t been able to prove that it would be more convenient, nor that it would be more economical. That is why all creditors and the Patriot Company are vigorously opposing the transfer. Yet the union claims that moving the incident to Charleston will be more convenient for the retirees and workers that are represented through the UMWA.

Patriot’s bankruptcy troubles began when it filed for a Chapter 11 protection in July. It was first asked by the union to move the case to the other location, and then the U.S. Trustee joined the motion. Patriot insists that the New York court will be the most cost-effective option and is the most convenient place to hold the bankruptcy hearings. The company argues that flights to and from Charleston, West Virginia are very expensive, adding to the costs of a company that is already cash-strapped. They also argue that professional fees may be higher if the bankruptcy is moved.

The reason that the union wants the transfer is because many of Patriot’s facilities, employees, and retirees are located in West Virginia. Even some of the creditors are centered there. Apparently, 2,000 active workers and more than 10,000 retirees will need to participate in the case, and don’t want to have to make the trek up to New York to do so. The debate as to where the hold the case will continue to grow until one side reaches a definitive decision. If you have been involved in a bankruptcy debate like this one, then make sure to involve your attorney in the conflict. Having legal representation on your side may be just what you need!