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Peabody Energy Files for Chapter 11 Bankruptcy

The biggest coal company in the United States, Peabody Energy, filed for Chapter 11 bankruptcy in mid-April 2016. Multiple factors contributed to the company's slowed sales, such as the economic slowdown of China and increased regulations for the coal industry. The company has been in operation since 1883.

Peabody is not the only coal company suffering from high costs and low profits. Other pressures on these companies include low natural gas prices and high costs related to their healthcare and pension plans for current and retired employees. Coal production in the United States has been dramatically reduced in recent years, with a projected 752.5 million tons projected to be produced in 2016. This is approximately 25% lower than the amount of coal produced just two years ago. Peabody has suffered four consecutive years of losses. Paired with its $10.1 billion in debt, it has reached the point where it needs to restructure in order to become profitable once again. This is why it filed for Chapter 11 bankruptcy.

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