Peabody, Arch Coal May File Chapter 11 Bankruptcy on Obama Rules

[FBaggins]

Unless out-of-court restructurings for Arch Coal and possibly Peabody Energy gain traction, they could be the next two coal producers to file for bankruptcy protection as final regulatory rules requiring the reduction of carbon emissions by 32% from 2005 levels could finish the demolition job started by depressed prices and sluggish demand.

On Monday, the Environmental Protection Agency unveiled the final version of the Clean Power Plan and, perhaps not coincidentally, the largest U.S. coal producer, Alpha Natural Resources filed for Chapter 11 in the U.S. Bankruptcy Court for the Eastern District of Virginia in Richmond, leaving industry watchers wondering if that was the last domino to fall, or if there will be more filings to come.

The coal industry has already been strafed by bankruptcy filings this year, including Walter Energy (WLTGQ) (July 15), JW Resources (June 30), Patriot Coal's second bankruptcy filing (May 12), and Xinergy (April 6).In addition, Berau Capital Resources submitted a Chapter 15 petition on July 10, and Glencore (GLEN) said Tuesday that it plans to restructure its majority-owned subsidiary Optimum Coal Holdings under South Africa's Business Rescue framework, which is similar to Chapter 11.

Some analysts believe the impact of the Clean Power Plan on coal companies could be widespread.

http://www.thestreet.com/story/13244580/1/peabody-arch-coal-may-file-chapter-11-bankruptcy-on-obama-rules.html?puc=yahoo&cm_ven=YAHOO

[Erich Bloodaxe BSN]

1. Yet another place I'll give Obama kudos.

That will be immediately ignored, next time various folks proclaim that I always just 'hate' on him, and never give him credit for anything.

But good on him, nonetheless.