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Dec. 20, 2013

Patriot Coal Corporation Confirms Plan of Reorganization and Emerges from Bankruptcy

On December 17, 2013 the United States Bankruptcy Court for the Eastern District of Missouri confirmed the Plan of Reorganization of Patriot Coal Corporation and its 100 subsidiaries (the Company). The following day, on Dec. 18, 2013, Patriot successfully emerged from Chapter 11 by, among other things, closing an exit financing for $545 million and raising $250 million from the issuance of new notes and warrants to participating unsecured creditors.

Kramer Levin represented the Official Committee of Unsecured Creditors (the Creditors’ Committee). The Creditors’ Committee’s members included bond trustee Wilmington Trust Company, bond trustee U.S. Bank National Association, The United Mine Workers of America, United Mine Workers of America 1974 Pension Plan and Trust and American Electric Power Company, Inc. The Creditors’ Committee was also represented by local counsel, Carmody MacDonald PC, conflicts counsel, Cole, Schotz, Meisel, Forman & Leonard, P.A., and the financial advisory firms of Houlihan Lokey Capital, Inc. and Mesirow Financial Consulting, LLC.

Patriot Coal Corporation is a leading producer and marketer of coal in the eastern United States, with 10 active mining complexes in Appalachia and the Illinois Basin and 1.8 billion tons of coal reserves. The Company filed for bankruptcy protection in July 2012 with approximately $3.1 billion in liabilities.

Over the course of the 18 month bankruptcy, Kramer Levin, on behalf of the Creditors’ Committee, was the principal advocate for unsecured creditors on all major facets of the case, including, among other things, a lengthy trial related to the Company’s motions to reduce its active employee compensation and retiree healthcare benefits and an investigation of claims against Peabody Energy Corporation and Arch Coal, Inc. related to retiree healthcare benefit liabilities exceeding $1.3 billion.

Through the restructuring process, approximately 4,000 jobs were preserved and the Company exited Chapter 11 with an improved balance sheet, new five-year labor agreements with the UMWA, and settlements with Peabody Energy Corporation and Arch Coal, Inc. which provide significant funding for retiree healthcare benefits.

The Kramer Levin team on this matter included Corporate Restructuring partners Thomas Moers Mayer, Adam C. Rogoff and P. Bradley O’Neill; Employee Benefits partner Christine Lutgens; Environmental partner Charles S. Warren; Corporate partner David J. Fisher; Litigation partner Jonathan Wagner; Corporate Restructuring special counsel Gregory G. Plotko; Litigation special counsel Brendan M. Schulman; Corporate Restructuring associates Daniel M. Eggermann, David Blabey, Anupama Yerramalli, Andrew Dove and Stephen M. Blank; Corporate associates Jonathan B. Vessey and Steven Segal; and Litigation associate Joel Taylor.

The Carmody MacDonald PC team included partners Gregory D. Willard and Angela L. Schisler; the Cole, Schotz, Meisel, Forman & Leonard, P.A. team included partners Stuart Komrower and Roger Iorio; the Houlihan Lokey Capital, Inc. team included Matthew Mazzucchi, Fredrick Vescio, Daniel Tobin and Sanjeev Shahani; and the Mesirow Financial Consulting, LLC team included Larry Lattig, Monty Kehl and Adriana Vidal.

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