The bigger they come, the harder they fall.  Who's next?

Peabody Energy, recently the world's largest private coal company, filed for Chapter 11 bankruptcy this morning.  With the price of coal dropping and demand declining, Peabody got caught with excessive debt from their grand expansion plans of a couple years ago and no way to service the debt.  

Reuters, among many news outlets, has the story and does a good job with business news. 

Peabody was expected to be the big client for the Cherry Point coal port that SSA Marine and a changing cast of 49% partners have been planning since 2011 - or secretly even earlier.  It was Peabody that expected to ship 48 million tons of coal a year from their mines in Wyoming to Cherry Point here in Whatcom County and on to China.  Well, the Chinese market is not growing as expected, among other factors.  Basically, the price of coal dropped and dropped and is not expected to rebound.

Of course, if you read the trade press, Obama is responsible due to laws that prevent coal companies from trashing huge sections of grasslands and/or woodlands and polluting vast areas with their mine tailings.  In truth, these costs are not the reason for Peabody's financial difficulties.  Cheap shale oil and gas are responsible - and they are causing their own environmental nightmares.  The environment is probably not a net gainer in all this.

This bankruptcy is no surprise. Yesterday, their share price was one percent of what it had been just a year ago in April, 2015.  And in 2011, when plans were announced, Peabody was a monster $18B - eighteen billion dollar - corporation.  Yesterday, the value was $38M. 

The Guardian - a great news site in England - also has a very informative article about the future of coal.

Arch Coal Company, another monster coal company, filed for bankruptcy in January.  The business day before filing, they paid $8 million in bonuses to investors and laid off 400 workers.  This information has only been revealed this week by WyoFile, a great news source located in Casper, Wyoming, the very center of the state.  While Arch is not directly related to today's bankruptcy, its activities suggest we should stay tuned for further news even months from now on Peabody.  These guys will not go quietly.