Peabody Energy Corp., the company responsible for creating now-bankrupt Patriot Coal through a 2007 spinoff, said on Friday that it has no obligation to fund health and pension benefits for Patriot retirees affected by the company's insolvency, Reuters reported on Friday. Peabody said in court papers that new labor deals between Patriot and the United Mine Workers of America effectively relieve Peabody of any funding obligations. In a lawsuit relating to Patriot's bankruptcy, Patriot and Peabody are fighting over the responsibility to fund benefits for a group of about 3,100 retirees that Peabody agreed to continue covering after the October 2007 spinoff. A judge in May declared that Peabody was relieved of that burden when Patriot abrogated its labor obligations for all employees and retirees earlier this year and negotiated new, cost-saving deals as part of its restructuring in chapter 11 bankruptcy.
