Peabody Energy Corporation’s chapter 11 plan of reorganization


The effective date of Peabody Energy Corporation’s chapter 11 plan of reorganization took place on April 3, 2017. Led by Corporate Restructuring and Bankruptcy partner Kenneth H. Eckstein, Kramer Levin represented Elliott Capital Management and Aurelius Capital Management as holders of unsecured notes before and during the chapter 11 case, which was one of the largest bankruptcy filings in 2016.

Kramer Levin’s clients participated in Peabody’s DIP financing, litigation regarding contractual terms to determine whether over $1 billion in assets were secured or unsecured, and comprehensive mediation that achieved a settlement of the contract dispute and agreement across Peabody’s capital structure regarding the terms of a chapter 11 plan. The foundation of the plan, which was supported overwhelmingly from every class of creditors, was a $1.5 billion equity raise. Kramer Levin’s clients were co-proponents of the plan and, along with several other holders of unsecured and second lien notes, agreed to backstop the entire $1.5 billion equity financing. This equity commitment is one of the largest in history for any chapter 11 debtor, and it enabled distributions to unsecured creditors that were several times larger than the recoveries in other recent coal industry bankruptcies.

Kramer Levin has advised with a team including Kenneth H. Eckstein (Picture), Corporate Restructuring and Bankruptcy partners Stephen D. Zide and P. Bradley O’Neill, special counsel David E. Blabey, Jr., and associates Andrew M. Dove, Joseph A. Shifer, Alana Katz, Philip Michael Guffy and Rama Douglas; Corporate partners Abbe L. Dienstag, John Bessonette and David J. Fisher, and associates Drew Allen, Christopher M. Isaacs, Yael Steiner, Tai Aliya and Gabrielle Marin Nagler; Litigation partner Jeffrey S. Trachtman, special counsel Natan Hamerman, and associates Leah S. Friedman, Ryan Gander, Timur Tusiray and Catherine Hoge; and Tax partner Barry Herzog.

Involved fees earner: Kenneth Eckstein – Kramer Levin Naftalis & Frankel LLP; Stephen Zide – Kramer Levin Naftalis & Frankel LLP; Bradley O’Neill – Kramer Levin Naftalis & Frankel LLP; David Blabey – Kramer Levin Naftalis & Frankel LLP; Andrew Dove – Kramer Levin Naftalis & Frankel LLP; Joseph Shifer – Kramer Levin Naftalis & Frankel LLP; Alana Katz – Kramer Levin Naftalis & Frankel LLP; Philip Michael Guffy – Kramer Levin Naftalis & Frankel LLP; Rama Douglas – Kramer Levin Naftalis & Frankel LLP; Abbe Dienstag – Kramer Levin Naftalis & Frankel LLP; John Bessonette – Kramer Levin Naftalis & Frankel LLP; David Fisher – Kramer Levin Naftalis & Frankel LLP; Drew Allen – Kramer Levin Naftalis & Frankel LLP; Christopher Isaacs – Kramer Levin Naftalis & Frankel LLP; Yael Steiner – Kramer Levin Naftalis & Frankel LLP; Tai Aliya – Kramer Levin Naftalis & Frankel LLP; Gabrielle Marin Nagler – Kramer Levin Naftalis & Frankel LLP; Jeffrey Trachtman – Kramer Levin Naftalis & Frankel LLP; Natan Hamerman – Kramer Levin Naftalis & Frankel LLP; Leah Friedman – Kramer Levin Naftalis & Frankel LLP; Ryan Gander – Kramer Levin Naftalis & Frankel LLP; Timur Tusiray – Kramer Levin Naftalis & Frankel LLP; Catherine Hoge – Kramer Levin Naftalis & Frankel LLP; Barry Herzog – Kramer Levin Naftalis & Frankel LLP;

Law Firms: Kramer Levin Naftalis & Frankel LLP;

Clients: Elliott Management; Aurelius Capital Management, LP;

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Author: Ambrogio Visconti