The U.S. Bankruptcy Court issued an order approving Peabody Energy’s stipulation and motion for an order approving and memorializing the terms of the Debtors’ settlement of certain issues with the Illinois Department of Natural Resources (IDNR) regarding the Debtors’ reclamation bonding of coal mining operations in Illinois.
As previously reported, “The Debtors also dispute IDNR’s claimed ability to require the posting of additional or alternative forms of bonds. If the Debtors are required to fully collateralize approximately $92.2 million in reclamation obligations to permit the continuation of their Illinois operations, this would require the Debtors to devote nearly 23.3% of their available liquidity as of May 31, 2016, in accordance with the DIP Credit Agreement, to support the Illinois Mine Operations’ self-bonding.”
Court filed documents continue, “The parties have agreed that, commencing on the date the Stipulation and Order is approved by the Court: (a) IDNR shall not issue a substitution demand with respect to the Debtors’ self-bonding obligations; (b) IDNR shall have, pursuant to, and solely in the manner and to the extent permitted as a Bonding Superpriority Claim under the DIP Order, an allowed superpriority claim having priority over any or all administrative expenses of the kind specified in section 503(b) of the Bankruptcy Code in the amount of $12,897,495 (the ‘Superpriority Claim’) to secure the Illinois Mine Operations’ reclamation obligations (provided that under no circumstances will IDNR recover more than $12,897,495 on account of the Superpriority Claim other than if the Court reduces and reallocates another State’s Superpriority Claim to IDNR in accordance with that State’s court-approved stipulation and order regarding the Debtors’ self-bonding obligations); (c) within thirty (30) days of approval of this Stipulation and Order, Debtors shall cause to be issued one or more Bonding Facility Letters of Credit or provide third party commercial surety bonds or deposit cash (a ‘Collateral Assurance’) that meet the requirements of all applicable Illinois statutes and regulations in the amount of $3.2 million to secure the Illinois Mine Debtors’ reclamation obligations related to their Illinois Mine Operations.”
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