The Daily Docket: Furniture Brands Seeks Ok For Bankruptcy Bonuses

Patriot Coal Secures Financial Sponsor And Reaches Key Funding Settlements; Plans Emergence From Bankruptcy By Year-End

suffered a pair of setbacks Thursday in their trial preparations for the Justice Departments case against their proposed merger, The Wall Street Journal reports . Italys government recruited help from the state-owned postal service to inject capital into Alitalia, saving the struggling airline from imminent bankruptcy, says WSJ . Former Detroit Mayor Kwame Kilpatrick was sentenced Thursday to 28 years behind bars for standing atop a vast criminal conspiracy that prosecutors say contributed to the citys collapse into bankruptcy, reports WSJ . New York City Opera, which filed for bankruptcy-court protection last week after years of financial turmoil, said at least one other cultural institution may be interested in a merger with the company, The Journal reports . Jefferson County, Ala.,is meeting with J.P.
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In 2007, Peabody spun off operations and reserves in Central Appalachia, Northern Appalachia and the Illinois Basin to form Patriot Coal. 2012 Bankruptcy St. Louis-based Patriot filed for bankruptcy in July 2012, citing a drop in demand and $1.6 billion in lifetime health-care obligations for its retirees. It said the spinoff left it responsible for the benefits of three times as many retirees and dependents as active employees, saddling it with liabilities of $1.3 billion or more. Peabody said Patriot was a viable company when it was spun off, and that its acquisition of a separate company, Magnum Coal Co., along with a drop in coal demand and increased regulation, caused its financial burden. During Patriots reorganization, it won court approval of a proposal to reduce pensions and benefits to 13,000 unionized workers and retirees. The United Mine Workers of America continued to press it for contributions from Peabody, as well as Arch Coal. In 2008, Patriot bought Magnum Coal, which had acquired three Arch units in 2005.
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Energy Future Said Near Bankruptcy Loan Exceeding $3 Billion

(KKR) , TPG Capital and Goldman Sachs Capital Partners. The biggest-ever leveraged buyout left Energy Future with more than $40 billion in debt in a bet natural gas prices would rise. Instead, they plunged to below $2 from a July 2008 high of more than $13 per million British thermal units. The company said in April that creditors had rejected a prepackaged bankruptcy plan to restructure $32 billion in debt held by Energy Futures competitive power unit. The plan called for creditors to forgive obligations in exchange for equity and $5 billion in cash and new debt. Energy Future, which had $43.6 billion in debt as of the end of June, said in August that it has engaged in additional discussions with a broader group of creditors and continues to evaluate restructuring options including filing for Chapter 11 bankruptcy for some or all of the company, excluding power-line unit Oncor Electric Delivery Co. Oncor, the regulated and profitable power transmission and distribution business, is protected from any restructuring, according to corporate filings and credit ratings company Moodys.
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Patriot Plans Bankruptcy Exit After Accord With Peabody

Three months later, no assets have been divided and no major deals have been struck. In fact, a judge soon will hold a trial to determine if Detroit even is eligible to be in bankruptcy court to restructure at least $18 billion in long-term debt. Snyder's answers during a three-hour deposition can be turned into evidence at the trial. "It's extraordinarily rare" for a governor anywhere to be interviewed under oath about executive decisions, said Devin Schindler, who teaches constitutional law at Thomas M. Cooley Law School. Indeed, the attorney general's office tried to keep Snyder on the sideline by invoking executive privilege, a common defense. But that didn't seem to sit well with U.S. Bankruptcy Judge Steven Rhodes, so lawyers for the governor said he would agree to be interviewed. The deposition will be conducted in private in Lansing, although a transcript could be released later.
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Rick Snyder, Michigan Governor, Will Testify About Detroit Bankruptcy

Louis, features a giant foam model of the Statue of Liberty in August 2008. On Friday, a bankruptcy judge approved the the sale of YTB's assets to Jamraval Inc. for $3.5 million. It made the sole bid in the bankruptcy court's auction. The new business, owned by Sam Hathi, will operate as YTB Global Travel Inc. according to a statement. He will oversee day-to-day operations at YTB. We believe the YTB franchise can be turned around and that it can regain the leadership position that it once held in the travel services industry, Hathi said in a statement. Andy Cauthen, YTB's International's president and CEO, will remain at the company in an unspecified management Bankruptcy Lawyer position.
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YTB to emerge from bankruptcy following sale

"Reaching these agreements represents a pivotal juncture in Patriot's restructuring. With Knighthead's financial backing and the funding provided by Peabody and Arch, Patriot is now well-positioned to secure exit financing," said Patriot President and Chief Executive Officer Bennett K. Hatfield. "This sets a clear path forward for Patriot to emerge from Chapter 11 by year-end as a strong competitor in the coal industry." Under the terms of the Plan, the Company will receive an infusion of $250 million in new capital through a rights offering backstopped by Knighthead. Pursuant to agreements with the UMWA, the Company will make $75 million in direct cash payments to the VEBA, plus future payments from royalty and profit sharing commitments. The Company and the UMWA also reached a global settlement with Peabody that will provide the VEBA and the Company with significant additional funding. Under the terms of the settlement, Peabody will provide $310 million, payable over four years through 2017, to fund the VEBA and settle all Patriot and UMWA claims involving the Patriot bankruptcy. Additionally, Peabody will provide liquidity totaling approximately $140 million to the Company in the form of letters of credit. The final agreement is expected to be signed in the coming weeks and presented to the Court for approval at the November 6 hearing. Under the terms of the Company's settlement with Arch, the Company will receive $5 million in cash and a release of a $16 million letter of credit posted in Arch's name. In addition, certain expiring coal leases in Patriot's Logan County mining complex will be extended and Patriot will receive $16 million in cash for the sale of certain non-strategic metallurgical coal reserves. As with the Peabody settlement, the final Arch agreement is expected to be signed in the coming weeks and presented to the Court for approval at the November 6 hearing. As a result of the transaction with Knighthead and the Company's settlement with Peabody, the VEBA is expected to receive more than $400 million in cash over the next four years, and will have continuing income from royalty payments and profit sharing opportunities. These agreements resolve all matters with the UMWA. "I am pleased that we have been able to reach agreements that provide the UMWA with hundreds of millions of dollars in retiree healthcare funding," added Hatfield. "The best result for the UMWA and its members is for Patriot to emerge from bankruptcy as a healthy company that will continue to provide jobs and benefits, and we are now on track to achieve that goal." Patriot's Plan of Reorganization and Disclosure Statement can be found at www.patriotcaseinfo.com . The Disclosure Statement is subject to approval by the Court, and the Plan of Reorganization is subject to confirmation by the Court. The hearing to consider approval of the Disclosure Statement is scheduled for November 6, 2013. This press release is not intended as a solicitation for a vote on the Plan within the meaning of section 1125 of the Bankruptcy Code. Note: Background on Patriot's restructuring and transformation can be found at the Company's website, www.patriotcoal.com . About Patriot Coal Patriot Coal Corporation is a producer and marketer of coal in the eastern United States, with 11 active mining complexes in Appalachia and the Illinois Basin. Patriot ships to domestic and international electricity generators, industrial users and metallurgical coal customers, and controls approximately 1.8 billion tons of proven and probable coal reserves. Forward-Looking Statements Certain statements in this press release are forward-looking as defined in the Private Securities Litigation Reform Act of 1995. These statements involve certain risks and uncertainties that may be beyond our control and may cause our actual future results to differ materially from our current expectations both in connection with the Chapter 11 filings Patriot announced on July 9, 2012 and our business and financial prospects.
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