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This is more than 100% of the company's current net worth, as indicated by <br />stockholders' equity. Furthermore, even though there is a chance that Peabody <br />may sell its Colorado and New Mexico assets, such a sale would, according to <br />reports, eliminate only $300 million in self -bonding obligations.s This would <br />eliminate only a small amount of total reclamation liability and still place the <br />company's total liabilities to net worth ratio far above 2.5. <br />In spite of this, Peabody has generally asserted that it still is allowed to self -bond for its <br />mining operations. The reason is because the guarantor of its self -bond is Peabody Investments <br />Corporation, a subsidiary of Peabody Energy, which the company claims does meet the <br />requirements for self -bonding. <br />However, filings indicate that Peabody Investment Corporation's assets are entirely <br />pledged as collateral to Peabody Energy's debt .6 This appears to indicate there is no possible way <br />that this subsidiary could meet the criteria for self -bonding set forth at 30 C.F.R. § 800.23. If <br />Peabody Investment Corporation's assets are pledged as collateral to Peabody Energy, then the <br />subsidiary is as financially unqualified as the parent. <br />Peabody's poor financial status is underscored by numerous reports that the company is <br />very likely to file for bankruptcy this year. A January 20, 2016 Bloomberg News article reported <br />that Peabody is likely the next coal mining company to file bankruptcy, following on the heels of <br />Patriot Coal, Walter Coal, Alpha Natural Resources, and Arch Coal. According to the <br />Bloomberg report:7 <br />In terms of capital, Peabody had $1.4 billion in liquidity including cash and availability <br />under its revolving loans as of Nov. 5, according to a company filing. Its cash dropped to <br />$167.4 million on that day from $334.3 million at the end of September. At that rate, the <br />company is going to run out of cash in nine months, Bloomberg data show. <br />In a January 22, 2016 filing, Peabody disclosed an extensive debt exchange proposal and <br />ongoing discussions with debt holders to address its precarious financial status and potentially <br />avoid bankruptcy.8 However, industry observers have expressed skepticism that any potential <br />U&companyName=Peabody+Energy+Co!p.&formTvpe=10-K&dateFiled=2015-02-25. Excerpts attached as <br />Exhibit 2. <br />5 PR Newswire, "Peabody Enters into Agreement to Sell New Mexico and Colorado Assets," website available at <br />http://www.pm ewswire.com/news-re leases/peabody-energy-enters-into-agreement-to-sell-new-mexico-and- <br />colorado-assets-3 00182846.htm 1. <br />6 Peabody Investment Corporation's assets are pledged as collateral to Peabody Energy's debt. See Peabody Energy, <br />"Amended and Restated Credit Agreement," available at <br />http://www.sec.gov/Archives/edgar/data/1064728/000106472813000119/btu 20130930ex101.htm. Agreement <br />attached as Exhibit 3. <br />7 Xu Klein, J. and T. Loh, "The Coal Miner `On Everybody's List' as Next Bankruptcy Victim," Bloomberg <br />Business (Jan. 21, 2016), available online at http://www.bloomberg.com/news/articles/2016-01-21/the-coal-miner- <br />on-everybody-s-list-as-next-bankruptcy-victim. Attached as Exhibit 4. <br />B Peabody Energy, "Form 8-K" (Jan. 2, 2016), available at <br />hgp:Happ.quotemedia.com/data/downloadFiling?webmasterld=101533&ref=10684481 &type=HTML&symbol=BT <br />U&companyName=Peabody+Energy+Corp&fonnType=8-K&dateFiled=2016-01-22. <br />4 <br />