Bankrupt Coal Firm Can Shed Retiree Benefits in Asset Sale

A coal company liquidating through Chapter 11 can sell nearly all its assets to a buyer who refuses to take on a statutory obligation to fund retiree health benefits for life, a federal appeals court ruled.

The Dec. 27 decision from Judge Jill Pryor of the U.S. Court of Appeals for the Eleventh Circuit would leave the federal government on the hook for retiree benefits owed by Walter Energy, which filed for bankruptcy in 2015 and sought to sell its assets to Warrior Met Coal, Inc., a company owned by Walter’s senior lenders.

The case confronts what happens when the ...