Regulators Oppose Bankruptcy Asset Reorganization Plan
In early September, the asset reorganization bankruptcy plan for Patriot Coal has been opposed by regulators in Ohio and Pennsylvania, on the grounds that the plan did not sufficiently account for mine pollution cleanup. Regulators in both states filed separate motions in a Richmond, VA U.S. Bankruptcy Court.
One of the motions that was filed claimed that the bankruptcy plan did not leave the debtor with any ability to respond to environmental issues and necessary land reclamation for the Sunnyhill Mine Complex.
Under Patriot Coal’s Ohio Permit, penalties incurred by violations were not adequately covered. Another motion similarly argued that the debtor’s plan did not account for hundreds of millions of dollars that were needed for the pollution cleanup.
The Bankruptcy Dilemma
The trouble that Patriot Coal ran into here is something that anyone filing for Chapter 13 bankruptcy can encounter. Chapter 13 and Chapter 11 bankruptcy performs similar functions: they reorganize assets for individuals and businesses with steady income in order to eliminate debts over time. As part of this process, an asset reorganization plan needs to be put in place by the debtor, and approved in a court of law.
In order for companies like Patriot Coal to file a successful reorganization bankruptcy, their plan must be approved by the regulators. This isn’t simply for the sake of fulfilling a rule—it ensures that the debtor is able to pay off their debt, and also protects them from running into disadvantages. After all, the purpose of bankruptcy is to fulfill debts and give the debtor an opportunity to start anew. In the case of Chapter 11 and 13, it gives individuals and businesses the opportunity to repay their debts over time.
Contact a skilled Columbus bankruptcy attorney and learn more about Chapter 13 bankruptcy.