Rebel creditors of Peabody Energy Corp.'s reorganization plan have said they intend to appeal a bankruptcy judge's decision to allow the world's largest private sector coal producer to exit chapter 11 protection, Reuters reported yesterday. Bankruptcy Judge Barry Schermer in St. Louis approved last week a plan by Peabody, which has valuable coal assets both in the U.S. and Australia, to emerge from bankruptcy in early April with about $2 billion of debt. In a notice of appeal filed with the bankruptcy court in St. Louis, about a dozen money managers who voted against the plan asked an appellate court to review six issues decided by Judge Schermer in approving Peabody's reorganization. Their complaints mostly center around the terms of a private stock sale that formed part of Peabody's plan to slash more than $5 billion of debt and exit bankruptcy. To participate in the private offering, Peabody required creditors to support the reorganization plan. The objecting creditors have said this "premature" buy-in violated the U.S. Bankruptcy Code.
