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Peabody gets U.S. court approval to go with reorganization

Staff Writer |
Peabody Energy, the world's largest private-sector coal miner, can begin seeking creditor votes for a plan to cut $5 billion of debt and exit its Chapter 11 bankruptcy, a U.S. bankruptcy judge said.

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U.S. Bankruptcy Judge Barry Schermer overruled objections from opponents including state regulators, shareholders, environmental activists and even former executives. Their complaints can still be debated at a confirmation trial on March 16.

Peabody has said it hopes to emerge from its $8 billion bankruptcy in April with a plan that will raise what lawyers called "a monster" $1.5 billion in private capital and leave it with under $2 billion of debt.

Judge Schermer also approved the private capital raising over objections regarding some terms of the offering, including large fees to be awarded to certain creditors as part of the deal.

Peabody's biggest creditors support the plan, which the company defended in court over competing proposals by a small group of creditors that would see Peabody exit bankruptcy with about $2.4 billion of debt.

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