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Bankruptcy May Be Your Option

Another coal company seeks Chapter 11 bankruptcy protection

It is often difficult to operate a successful company in Oklahoma and across the country. Even companies that are run by employees with business sense and experience can struggle because of conditions beyond their control. For example, several coal companies have struggled financially over the last few years. Another company, Peabody Energy, has recently followed the example of several others before it by seeking financial relief through Chapter 11 bankruptcy.

When the company announced its intention, it listed several reasons that have contributed to the company's financial concerns. In recent years, the price of coal has dropped while competition from alternative energy sources and fracking has increased. Additionally, the coal industry has seen an increase in regulatory demands. Some sources claim that the company has $10.9 billion in assets and $10.1 billion in debt.

In 2011, the company invested in the Asia market after two years of rising coal costs. As part of the investment, it purchased MacArthur, a mining company in Australia, for $5 billion. Unfortunately, the investment did not pay off as the purchase coincided with a decrease in coal prices -- a slump that is still observable today.

Despite the efforts made toward a company's success, there are many factors that can contribute to financial issues. Many of these factors, including market conditions and increasing government regulations, are often difficult to predict and even more difficult to overcome. Seeking relief through bankruptcy often becomes the best option to manage overwhelming debt. While this company has chosen Chapter 11 bankruptcy, there are several options available. An attorney with experience with the process can help advise those in Oklahoma -- companies and individuals -- about their options and the most appropriate choice for each individual case.

Source: npr.org, "U.S. Coal Giant Peabody Energy Files For Bankruptcy", Camila Domonoske, April 13, 2016

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