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Peabody Energy (NYSE:BTU) went Chapter 11 in 2016. They still somehow managed to find $1.6 million to spend on government lobbying last year. This was down from $2.5 million in 2015. I believe this money could have been spent more wisely trying to avoid Chapter 11.

A special interest’s lobbying activity may go up or down over time, depending on how much attention the federal government is giving their issues. Particularly active clients often retain multiple lobbying firms, each with a team of lobbyists, to press their case for them.

Total Lobbying Expenditures: $1,820,000
Subtotal for Subsidiary Peabody Investments: $1,300,000
Subtotal for Parent Peabody Energy: $520,000

Itemized Lobbying Expenses for Peabody Energy

Firms Hired Total Reported by Filer Reported Contract Expenses (included in Total Reported by Filer)
Greenberg Traurig LLP $320,000
Gephardt Group $200,000
$520,000

Peabody Energy wasn’t the only company that spent big on lobbying prior to filing Chapter 11. This Bloomberg article details how five coal-mining companies spent $95 million to lobby U.S. lawmakers and more than half a billion dollars on salaries for top executives in the decade before they filed for bankruptcy. Documents from Peabody’s $10.1 billion bankruptcy show the company has given money to scientists skeptical of climate change, a group fighting state environmental regulations, and Washington public relations specialist Rick Berman.

The Peabody Energy lobbying expenses are likely way up in 2017 now that they are no longer in Chapter 11. Keith Williams points out Peabody has been a leader of lobbying efforts for the whole industry and now this continues as it has joined with Arch Coal (NYSE:OTC:ARCH) and Cloud Peak Energy (NYSE:CLD), in a backroom role in seeking to keep the U.S. in the Paris Climate Agreement.

What bothers me about all the government lobbying is how you can have a company on the verge of bankruptcy or in bankruptcy such as a Peabody Energy and they somehow find the money to pay for lobbying and of course huge compensation to their executives. In cases like Peabody Energy, the executive compensation prior to the reorganization is nothing compared to what the executives receive post reorganization, see exhibit 4 of the Peabody Energy Plan Term Sheet. Read Peabody Energy and the Smash and Grab Technique to learn just how Peabody Energy executives earned the compensation of a lifetime in a single year by smashing Peabody Energy and grabbing valuable Peabody shares on the other side.

There also is the unfinished business of former Peabody Energy retail noteholders seeking justice with their recent .06 and .21 recovery on their Peabody Energy 6s of 2018, 6.5s of 2020, 6.25s of 2021, and 7.875 of 2026 and no recovery I see on the 4.75 convertibles of 2066. Please message me on Seeking Alpha if you are a former Peabody Energy retail noteholders and you too would like to explore your options with me and other former Peabody Energy retail noteholders.

Since late last year, I have been keeping the SEC, USDOJ, The U.S. Trustee, and the Attorneys General of MO and NY very aware of how the retail noteholders and shareholders have been getting mistreated beyond comprehension with their investments in Peabody Energy.

I sold most of my BTU shares after they were received as a result of the Peabody Energy retail notes cancellation and rights offering. I have a small amount of shares left in a small Fidelity account. My Peabody Energy notes, which were $.79 in December, have been cancelled and are worthless. My Peabody Energy investment has dropped $90,000 from the December pricing.

Disclosure: I am/we are long A SMALL AMOUNT OF BTU SHARES.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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