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Patriot last week sued Peabody, saying it wants to ensure that Peabody doesn't try to use Patriot's bankruptcy "to escape Peabody's own health care obligations to certain retirees." Peabody fired back, saying in a statement that its contract with Patriot states Peabody will fund a portion of Patriot's retiree health care expenses for specified retirees
-- and that "we have been providing funds under this contract since the spin-off." "Patriot is taking the untenable position that our payments should continue in full in the future even if Patriot's expenses are reduced," Peabody's statement read. "Such a claim is not only unreasonable but counter to the fundamental basis of the language in the contract. These are Patriot's obligations and, to the extent they are reduced, we will meet our agreement with Patriot to fund the new lower levels." The union previously filed suit against Peabody and Arch Coal in West Virginia, claiming they set up Patriot to fail so pension and health care benefits could be shed. After the 2007 spinoff, Patriot acquired mines that Arch Coal
-- another St. Louis-based coal producer -- had spun off into Magnum Coal. Union leaders have said the benefit cuts would affect retired miners and dependents mostly in West Virginia, Illinois, Indiana, Kentucky and Ohio.
[Associated
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