Patriot Coal Shareholders Likely will be Wiped Out

Patriot Coal Shareholders Likely will be Wiped Out
Patriot Coal Shareholders Likely will be Wiped Out




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Patriot Coal Corporation (NYSE:PCX) filed for Chapter 11. I have been getting emails on it so thought I would answer.

Not interested.


Patriot Coal Corporation  listed ~$500M in net equity. The problem with that is most of their assets are coal.

Some basics:

The company postponed closing a $625 million, 9.5 percent five-year loan after saying May 14 that a key customer might default on a contract for coal that had fallen as much as $30 a ton below the original contracted price. The same day, the company cut a 2012 forecast for sales of steelmaking coal.
On June 1, Patriot filed a complaint in federal court in Charleston, West Virginia, alleging that Fort Meyers, Florida- based Keystone Industries LLC breached a contract to buy “hundreds of thousands of tons” of coal. Later that month, Principal Accounting Officer Christopher Knibb resigned and was replaced by Chief Financial Officer Mark Schroeder, according to filings with the SEC.

Patriot got 87 percent of its 2011 revenue from coal mined in the Central Appalachian region of the U.S., which includes Kentucky and West Virginia. Its operating costs in Appalachia were $71.06 a ton last year while the average price of Central Appalachian coal futures was $75.86.
The bankruptcy case is In re Patriot Coal Corp.
; 12-bk- 12900; U.S. Bankruptcy Court, Southern District of New York (Manhattan).

We have followed the coal story for a while now in as part of our rail traffic series. The drop in demand for coal has been huge and unlikely to get better anytime soon. The natty story is real and supplies are plentiful to ensure it stays the electrical power provider of choice due to low cost for a long time, displ