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Peabody Energy Objection Filed

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The U.S. Trustee assigned to the Peabody Energy case filed with the U.S. Bankruptcy Court an objection to the Debtors’ motion for an order (i) approving (a) a private placement agreement and (b) backstop commitment agreement; (ii) authorizing the Debtors to enter into (a) a plan support agreement, (b) private placement agreement and (c) backstop commitment agreement; (iii) approving (a) a rights offering, (b) related procedures and (c) payment of related expenses and (iv) granting related relief.

The objection explains, “The Motion should not be granted for three reasons. The Motion operates as an improper sub rosa plan by ‘locking in’ payment terms before confirmation, unlawfully pays numerous professionals, and provides for the payment of transaction fees that the Debtors’ own exhibit to the Motion establishes are exorbitant and therefore precluded by section 503(b)’s mandates. If the Court approves the Motion, it remains unclear what substantive plan provisions could be objected to and inappropriately shifts the burden of proving the Plan not confirmable on those opposing the Plan, thus relieving the proponents from their burden in demonstrating that the Plan satisfies all confirmation requirements in section 1129.”

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