Patriot Coal Sales LLC and Vitol Inc. have worked out an agreement on changes to their trading relationship to account for Patriot Coal Sales and parent Patriot Coal being in Chapter 11 bankruptcy protection.
Patriot Coal, a major coal producer in West Virginia and western Kentucky, and related companies filed July 9 for Chapter 11 at the U.S. Bankruptcy Court for the Southern District of New York. Patriot didn’t publicly file the new agreement with Vitol with the court on June 24, only summarizing it. Parties objecting to the new agreement have until July 31 to do so.
The material amendments to the existing agreement are:
- revisions to certain economic terms;
- elimination of the filing of Patriot’s current chapter 11 case as an event of default;
- addition of certain events of default relating to conversion or dismissal of Patriot’s Chapter 11 case, appointment of a Chapter 11 trustee or an examiner with expanded powers, and certain other actions taken by Patriot or a third party during the Chapter 11 case;
- addition of certain acknowledgments regarding waiver of the automatic stay on legal actions against the bankrupt Patriot companies; and
- release granted by the Debtors and their bankruptcy estates to Vitol for any alleged liabilities, claims or causes of action relating to the agreement (except as expressly provided for in the amended agreement).
Patriot separately on July 24 filed a similar request for changes in its agreement with another international coal trader, EDF Trading North America LLC. Like the Vitol deal, the EDF agreement has a July 31 objection deadline and a requested Aug. 2 court hearing. EDF and Patriot are parties to four agreements under which Patriot sells coal to EDF.