Late Wednesday, Peabody announced it will pay hundreds of millions of dollars to settle the dispute, pending approval of a St. Louis bankruptcy judge.
"Peabody has continued to fund healthcare benefits for retirees during Patriot's bankruptcy proceedings," said Peabody Energy Executive Vice President Law, Chief Legal Officer and Secretary Alexander C. Schoch. "We are pleased to resolve the uncertainty among Patriot retirees by providing substantial funding for the newly established Voluntary Employee Beneficiary Association (VEBA). Future healthcare benefits for Patriot retirees will now be determined by managers of the new VEBA."
Peabody will pay more than $300 million over four years to fund the health benefits to settle all claims by Patriot and the miners' union. Additionally, Peabody will provide $140 million in letters of credit to Patriot, which hopes to exit bankruptcy protection by the end of 2013.
Another part of the agreement calls for the UMWA to dissolve most of its 35 percent stake in Patriot, which the union received as a result of a May Bankruptcy court ruling.
"I am very pleased that we have been able to reach this agreement with Peabody and Patriot," said UMWA International President Cecil E. Roberts. "This is a significant amount of money that will help maintain health care for thousands of retirees who earned those benefits though years of labor in America's coal mines. This settlement will also help Patriot emerge from bankruptcy and continue to provide jobs for our members and thousands of others in West Virginia and Kentucky."