Patriot Coal Bankruptcy Case Shifts from New York to Missouri
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Patriot Coal Bankruptcy Case Shifts from New York to Missouri

December 14, 2012


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The bankruptcy filing of Patriot Coal, which has been in a state of geographic limbo for several months, is being moved from New York to Missouri at the request of the United Mine Workers of America, according to a Reuters report.

Sources say the massive coal company is based in St. Louis, Missouri, but corporate officials felt that New York offered a friendlier venue for their case. So this July, Patriot Coal decided to file for bankruptcy hundreds of miles from home.

However, one of the company’s key labor unions, the United Mine Workers of America, claimed that the case should be moved closer to Patriot’s operations. U.S. Bankruptcy Judge Shelley Chapman agreed with the union and moved the case to Missouri.

According to Judge Chapman, Patriot’s decision to open two new units in New York just weeks before filing for bankruptcy was "simply not fair," and represented a cynical attempt to establish jurisdiction in the eastern state.

In response, the union asked the judge to transfer the case to West Virginia, where the company mines most of its coal, but sources say the union was still pleased with the decision to move the case to St. Louis.

After the judge’s decision, the union released a statement in which it wryly observed that "[n]obody has ever mined one ounce of coal in Manhattan." According to the union, Judge Chapman’s decision "brings the case to the heart of the Illinois coal basin, home to many of our active and retired members and their families."

Judge Chapman, however, chastised the union for attempting to move the case to West Virginia, which she felt was a brazen as the company’s effort to keep the case in New York.

Sources suggest, though, that the venue shift was a crucial win for the union, whose 10,000 retired members are facing significant cuts to their health benefits and retirement pensions thanks to Patriot’s decision to eliminate debts in bankruptcy court.

The energy giant filed for bankruptcy this summer, hoping to take advantage of New York’s reputation as a favored location for corporate bankruptcies. Sources also note that most of the company’s financial gurus and attorneys live in New York.

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