Democratic presidential candidate Hillary Clinton has waded into the messy Patriot Coal bankruptcy case. Clinton called for Peabody to do “the right thing” and honor its commitments to fund worker benefits as it agreed to in a settlement reached in Patriot’s 2013 bankruptcy proceedings.

Patriot Coal
Data via CapitalIQ

Peabody says not paying worker benefits because Patriot Coal violated bankruptcy deal

During Patriot Coal’s first bankruptcy case in 2013, Peabody agreed to pay $310 million over the next four years towards Patriot retiree health benefits. The agreement finally settled responsibility for the benefit liabilities related to the businesses that Peabody spun off to form Patriot in 2007.

Recently, Peabody that the bankruptcy judge annul the earlier deal, claiming that the situation around Patriot’s second chapter 11 case essentially voids its obligations. The judge in the case ruled that Peabody could move ahead with this argument, but the United Mine Workers of America are appealing the decision.

Peabody claims Patriot has violated the settlement terms in its second bankruptcy, so therefore it does not have to pay the retiree benefits as agreed earlier. That deal required Peabody to throw in $75 million to a benefits trust in January 2016 and an additional $70 million in January 2017.

Statement from Hillary Clinton

On Monday, Hillary Clinton came out publicly in support of the retired miners at Patriot Coal, who according to her, “put their own health and safety at risk for years so the rest of us could have the affordable, reliable electricity we take for granted”—and their dependents don’t deserve having to risk losing their benefits. They are entitled to the benefits they’ve earned, and which Peabody just two years ago committed to pay. I hope Peabody does the right thing, reverses course and honors the commitments it’s made. And as president, I will make sure America stands with coalfield communities and families.”

Statement from Peabody

In a statement released Monday addressing Clinton’s comments, a Peabody official noted that Clinton is “misinformed.”

According to Vic Svec, Peabody’s senior vice president of global investor and corporate relations, “Peabody has continued to live up to our obligations, and we are asking the court that originally approved the 2013 settlement agreement for clarification given that Patriot has breached its obligations under that agreement with Peabody and the UMWA.”