For Immediate Release
Washington DC: 202-547-1141
San Francisco: 415-977-5500
Peabody Energy’s Plan to Leave Bankruptcy Protection is Short-Sighted and Reckless
WASHINGTON - Peabody Energy emerged from bankruptcy on Monday after shedding $5 billion in debt that it accumulated from reckless coal investments it made over the past decade. Despite the company’s efforts to restructure itself through Chapter 11, many creditors, environmental organizations, and former executives have criticized Peabody’s decision to leave bankruptcy protection because its reorganization doesn’t go far enough to avoid the same financial mistakes that led the company to file for bankruptcy last year.
Peabody Energy is relying on overly rosy market projections that predict a coal resurgence in the American energy sector, when market signals show a clear shift away from coal and toward clean energy like solar, wind and energy efficiency. The assumption of robust, long-term coal demand is what led the company to purchase billions of dollars in assets prior to the coal market collapsing and forcing it to file for bankruptcy.
Prior to Peabody emerging from bankruptcy, Sierra Club filed an objection to Peabody’s reorganization plan, urging the court to reject the plan based on its flawed assumption of a miraculous recovery of the coal market despite the clear market indicators showing coal cannot compete in many places in the United States. Peabody going back into bankruptcy would put the company’s environmental responsibilities in jeopardy and endanger the health of communities across the United States.
In response to Peabody Energy’s emergence from bankruptcy, Mary Anne Hitt, Director of Sierra Club’s Beyond Coal campaign, released the following statement:
“Peabody’s reorganization plan that’s allowing the company to leave bankruptcy protection is short sighted and reckless. As utilities continue retiring coal plants and renewable energy production soars, Peabody is betting on a coal revival that simply isn’t going to happen.
“By moving forward with blinders on, Peabody is once again putting workers, communities, and even its shareholders at risk. It is more important now than ever that Peabody recognize the reality that clean energy will continue to grow as the dominant source of new power on the electric grid and that America’s coal plants will continue to age and retire.”
The Sierra Club is the oldest and largest grassroots environmental organization in the United States. It was founded on May 28, 1892 in San Francisco, California by the well-known conservationist and preservationist John Muir, who became its first president. The Sierra Club has hundreds of thousands of members in chapters located throughout the US, and is affiliated with Sierra Club Canada.