| CHICAGO, March 23
CHICAGO, March 23 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
U.S. Bankruptcy Judge Barry Schermer in St. Louis approved
last week a plan by Peabody, which has valuable coal assets both
in the United States 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
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.
In an e-mailed statement, Peabody said its reorganization
plan had received a creditor approval rate of 93 percent and
that it did not expect this appeal to derail its plans to emerge
from Chapter 11.
"The bar for appeals in these types of cases is typically
very high. Absent a court-ordered stay, we continue to expect to
emerge in early April," Peabody said.
A group of hedge funds, including Elliott Management and
Aurelius Capital Management, is expected to reap hundreds of
millions of dollars in gains from Peabody's $750 million private
placement of new shares at a 35 percent discount to the
estimated value of its reorganized stock.
(Reporting by Tracy Rucinski; Editing by Noeleen Walder and