Coal producer Peabody Energy Corp. says it will pay hundreds of millions of dollars to settle a drawn-out legal dispute over health care and pension benefits for thousands of retirees who worked for bankrupt Peabody spinoff Patriot Coal Corp.
The St. Louis-based companies and the United Mine Workers of America union announced the deal late Wednesday. It will be submitted for consideration to a St. Louis federal bankruptcy judge overseeing Patriot's bankruptcy.
As part of the deal, Peabody will pay $310 million over four years to fund the health and pension benefits to settle all claims by Patriot and the miners' union.
Peabody also will provide about $140 million in letters of credit to Patriot, which expects to emerge from Chapter 11 bankruptcy by the end of this year.
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