NEW YORK – A U.S. court approved a labor deal between bankrupt Patriot Coal Corp and its miners' union on Tuesday, putting the company on track to emerge from bankruptcy by the end of the year.
A deal this month for new collective bargaining agreements and retiree healthcare benefits with the United Mine Workers of America helped avoid more drastic cutbacks Patriot was authorized to impose earlier this year.
Bankruptcy Judge Kathy Surratt-States, who is overseeing the company's restructuring in St. Louis, approved the agreement on Tuesday, Marshall Huebner, a lawyer representing the company, told Reuters.
The judge also granted the company's request to amend an EBITDA covenant in its debtor-in-possession financing agreement, he said.
"We view the consensual agreement with the UMWA as a major milestone in our restructuring," Huebner said.
Patriot declared bankruptcy in 2012, saying it needed $150 million in annual labor cost savings to regain profitability. The United Mine Workers, which represent 1,700 current Patriot workers and 13,000 retirees and their relatives, have fought to salvage benefits.
The bankruptcy case is In Re Patriot Coal Corp, U.S. Bankruptcy Court, Eastern District of Missouri, No. 12-51502.
(Additional reporting by Nick Brown; Editing by Edwina Gibbs)