Read TCS’ official statement on Peabody’s Bankruptcy here.

On Wednesday, April 13^th, the largest U.S. coal producer, Peabody Energy, finally filed for chapter 11 bankruptcy after years of losses, including $2 billion in 2015 alone.

In its filing, Peabody listed $10.1 billion in debt and $11 billion in assets. The company has a total of $2 billion in outstanding mine clean-up or reclamation liabilities, $1.4 billion of which is held in unsecured “self-bonds.” Self-bonds are similar to self-insuring, where future costs of mine cleanup are insured only by the company’s overall financial health instead of a surety bond or letter of credit, in which case these funds would come from a third party.

Peabody’s bankruptcy comes after a string of other high-profile bankruptcy filings by companies such as Arch Coal and Alpha Natural Resources. In Arch’s bankruptcy proceedings, only $75 million of its $485 million in self-bonded reclamation liabilities were secured. Alpha Natural Resources was similarly approved to guarantee only $61 million of its $411 million in self-bonding obligations in bankruptcy proceedings. Both companies’ remaining unsecured self-bonding liabilities, combined with Peabody’s $1.4 billion in unsecured self-bonds add up to a whopping total of more than $2 billion that taxpayers could be forced to pay.

None of these companies’ bankruptcies were a surprise, and it is obvious that these companies should not have qualified to self-bond their reclamation costs in the first place. With Peabody now bankrupt, there is no doubt that self-bonding practices need to be reformed to protect taxpayers from covering these costs.