Patriot Coal Corp. sought Chapter 11 bankruptcy protection in a New York Court, citing decreased demand due to warmer winters and increased use of natural gas.
The demand for coal has reached a 24 year low as more utility companies are choosing cheaper natural gas for energy production. Burning coal has become more costly due to increased environmental regulations on coal emissions.
Irl F. Engelhardt, Chief Executive Officer for Patriot said in a statement, “The Coal Industry is undergoing major transformation and Patriot’s existing capital structure prevents it from making the necessary adjustments to achieve long term success.”
In their bankruptcy filing Patriot listed their assets and $3.57 billion with liabilities of $3.07 billion. The company has secured $802 million in loans to operate while they restructure, pending approval of the court.
Patriot will ask the bankruptcy court to allow them to continue paying employee salaries, health insurance and other benefits. The company has already laid off 1,000 employees and contractors.
Bankruptcy lawyers offer troubled companies the chance to restructure their debts and develop a business model that will allow them to be once again be profitable.
Like businesses, individuals can seek out bankruptcy attorneys to restructure their debts and give them the opportunity to start over.
People have the option of filing for Chapter 11, Chapter 7 or Chapter 13 debt protection. Each filing has different requirements and which can be outlined by a bankruptcy lawyer. In many cases, debts can be reduced or even dismissed.