ST. LOUIS -- Coal producer Peabody Energy Corp. says it will pay hundreds of millions of dollars to settle a drawn-out legal dispute over health care 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 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.
Union president Cecil Roberts said he was very pleased with the agreement.
"This is a significant amount of money that will help maintain health care for thousands of retirees who earned those benefits though years of labor in America's coal mines," Roberts said in a statement.
"This settlement will also help Patriot emerge from bankruptcy and continue to provide jobs for our members and thousands of others in West Virginia and Kentucky," he said.